In Ubuntu 20.04 Gnome Shell, application indicator on top panel has wide spaces between icons. You can reduce the icon spacing via an extension called Unite.

Unite is a Gnome Shell extension which makes a few layout tweaks to the top panel and removes window decorations to make it look like Ubuntu Unity Shell. With the extension, your system tray area will look like:

To install the extension, do following steps one by one.

1.) Open terminal (Ctrl+Alt+T) and run command:

sudo apt install chrome-gnome-shell

2.) Run command to install the extension required x11-utils library:

sudo apt install x11-utils

3.) Go to extensions.gnome.org/…/unite/, toggle on and install the extension.

If you don’t see the toggle icon, click link to install browser extension and refresh this web page

The extension by default reduces top bar item spacing. To tweak other panel appearance, open Gnome Tweaks (or Extensions tool), and go to unite settings.