Sounds like he was telling the straitest truth then got threatened into "being careful".
Probably especially about describing the new corners cut by whatever the 'fix' is.
If you un-pretty the words that people who stand to make money off the game carefully use to describe the situation, and look for clues and trends all games are having, it comes down to it's going to be uglier, shorter, or worse language options. Most likely one of the two former.
Any way you look at it, if you notice what's coming out across the board for 360, DVD size IS limiting and DOES mean each game HAS TO cut some corner. All the decent games actually are literally CRAMMED on the disks. Making a game that looks as good as 360 possibly can... forces it to be short. Making a reasonably long game... requires simpler and uglier graphics even with compression. Don't believe me? Find a long 360 game that's not sports, uses a single disk, and looks as detailed as the best. (Sports games achieve length + graphics by using the same small environments over and over or for long times.)
And compression itself is not lossless either, or lossless is a misleading word. If it's a lot of compression the quality WILL degrade considerably. Even with a so-called "lossless codec". And regaining any usable amount of space takes a LOT of compression. It's like trying to stuff twice as many beans into the same jar. It won't fit no matter what you do unless you cut huge chunks out everywhere. The best you can do is cut them them to fit like airtight puzzle pieces but even then, when you decompress them out of the jar, they still look a lot crappier and less like the real thing.
While a lot of fans like to fantasize that the company found some magical way to solve space issues without glaring sacrifice, the fact is, no such creature exists. The fact is there was probably no other way to cram the game onto the disk than either:
Cutting content: Making the game fit by making it shorter, while keeping the graphics top-notch
Shrinking the video files: Tons of extreme compression, saving just enough space to fit all the original bells and whistles in.
Switching to text-only translations for certain countries, which sucks if you're those countries because the game loses immersion for them. (unless it's a JRPG which traditionally has that feel anyway.)
The truth is, it's a pity 360 won't let HD-DvD versions of any game come out, even though it makes all units omni-game, which is a good thing in its own way. The price is that nothing can come out with length, graphics that truly use a lot of the 360's potential, AND omni audio translation all in one.