Reduce size of TOO large panorama .DNG's

The reason behind this is actually fairly simple. The resulting dng file is demosaiced and has red, green, and blue values at every pixel. Your original raw files are Bayer Mosaiced, meaning that every pixel only has a red, green, or blue filtered value. In the resulting dng file because the projection is completely remapped and you would lose information by artificially remosaicing the pixels into the new file, every pixel has to have all three components. So for a 24 megapixel camera (which this probably is), the original raw file size is expected to be 12 bit/8 bit*24 million which is 36 MB uncompressed and about 20 megabytes losslessly compressed. When you stitch this into a three-raw cylindrical panorama with 1/3 overlap, you end up with about 56 megapixel in the ideal case but usually somewhat more. However, now you need to store a full 12 bits of red, green, and blue at every pixel, which means the file size would be 12/8*56 * 3 = 252 MB uncompressed, or about 100 to 126 MB compressed (Adobe's compression algorithm is far better than that that camera makers use).

There really is no way around this. I have asked Adobe several times for a way to reduce the resolution of the resulting panorama in the panorama stitcher interface with a simple slider as I often end up with panoramas that are so large that Lightroom can't deal with them very well anymore (200 to 1000 megapixels is not out of the ordinary for me) but they haven't implemented it.

You're most likely using Perspective projection, which stretches the image to fit the "rectilinear" angle of view. Try using Cylindrical projection for panoramas that show stretching with the Perspective setting as shown below. Not only does it inflate the file size, but it also degrades the image quality in the stretched areas (corners and edges). Also there's nothing wrong with exporting the panorama DNG to a JPEG file and then deleting it. But make sure to apply the Basic panel Tone settings to recover any highlight clipping or blocked shadows, which won't be fully recoverable once exported. There's generally no need to apply other settings, which can just as effectively be applied to the JPEG. You may also want to choose 'Adobe RGB' Color Space in the Export module to help preserve areas that are outside the sRGB gamut. A JPEG Quality setting of 80 is more than sufficient unless you plan on also editing the file in PS. All "destructive" pixel editing should be done using 16 bit/color TIFF file format to prevent build-up of compression artifacts when using multiple file saves.

Don't take my word–Try it for yourself. Create a panorama DNG, apply the Tone edits I suggested above, Export to 80 Quality Adobe RGB JPEG with no Resize or Sharpening, and then continue editing both files in LR. Once completed compare the two files at 1:1 Zoom View.