It's not only about compression. It all starts with thorough art direction and a firm desire to keep an orderly project. 

If you know exactly what you want on screen, as to know what things need textures and which can do with just materials, and which rigs and animations need to be more or less complex, and you keep a close watch on which files get included in the builds of the game, so you can weed out content that has been replaced with newer versions, you will be a lot better off.

It goes a much much further than that though, in both regards. Books could and probably have been written on this topic. :)

So the game is smaller on the Switch while at the same time having more content compared to the Wii U version.

Could explain what happened with Lego City Undercover.

Hm...maybe...just maybe...I'm going for a download version.

Pretty small. 128gb is gonna last for quite some time

That's not a good point. PS3, which is weaker than Switch, had linear games with very big file sizes like God of War Ascension. While a big open world more demanding game, like Breath of the Wild like you said, is only 13GB. 

There's only one simple explanation: they invest more time/effort compressing stuff like audio, because like you said their hardwares have less storage, so it's more important.

im willing to bet Xeno2 has a smaller file size than XenoX

Higher quality assets. Especially audio.

It's more about being thorough.  Not having more textures than the game needs to look good is one.  A lot of modern games will have multiple variants of, say, a road texture when really one would do, you would never notice.  Games will have assets that are replaced during development still left in, basically taking up space while providing nothing.  Some games have meshes that are much more complex than need be, providing no appreciable added  details.  And of course audio files are many times larger than need be (not higher quality, just bigger, no appreciable quality is added).  With racing games, being thorough about stuff like this lets you get real lean real fast.  Most modern devs on PS4 don't because mandatory installs are mandatory and therefore have no incentive to keep their unpacked file sizes small enough to play off the physical media.  Nintendo has never had mandatory installs and therefore wants smaller files to make it easier to fit on whatever physical media they use and play off of it smoothly.

I don't really understand your point sorry. How does an outlier prove a universally understood concept wrong? There will always be exceptions, but the basic idea of 'better assets (which require more power) = larger file' isn't really up for debate. There's a reason why the average game file size has without fail grown with each significant jump in hardware, and despite their active incentive to keep file sizes down Nintendo aren't free from this either. Even BotW, whose resource balancing is exactly what you want to keep file sizes down (asset quality is often sacrificed in favour of dynamic elements such as the physics engine), wouldn't fit on a double capacity 360 disk.

The lack of significant incentive for PS4/X1/PC developers to make their games smaller does increase the average size of their games, but all three of the reasons i listed can have a significant effect on file size. They aren't always equally relevant, e.g. it's possible for a game to be huge, make good use of high-spec hardware, and still be a small (it could have simple and frequently re-used assets, but amazing lighting, physics, and shader engines), but they all can be significant. As far as asset quality goes the general trend just happens to be that as you gain access to more power, a good chunk of that is directed at assets. Textures in particular have been slower to hit the harsher levels of diminishing returns as poly counts. 

That's pretty good, compared to the Wii U version, but 32GB internal memory definitely is not enough :p