Using the File > Automate > Contact Sheets II command, there's always going to be a lot of white space - that's just how PS does it. When you're setting the sheet up, you can reduce the number of columns and rows and that will make the thumbs bigger, but that's about as far as it will go. It's not a function that I've found any practical use for yet. Much better to make your own from scratch - if you record an action, it won't take long to do.