I think they have smaller file sizes meaning they are zipped. Is this right?
These are backup files created by Emacs. See Backup in the Emacs Manual.
The manual also says this:
When Emacs makes a backup file, its name is normally constructed by appending
~to the file name being edited; thus, the backup file for
To answer the second (main) part of the question:
No, backup files created by Emacs are not compressed; the smaller size of
foo.txt~ compared to
foo.txt means that
foo.txt was smaller when
foo.txt~ was created.