One of the things that I am often explaining to people new to tightly rolled oolong is that the tea expands so much--to about four times the original size after steeping. I often say that a little bit goes a long way.
In Taiwan oolong tea production has evolved over the years. One of the ways I've learned about this is through drinking aged oolongs. With the aged teas the roll is not as tight as the rolled teas of today because innovations in processing equipment have created the ability to make tighter and tighter tea balls. This tea is different than gunpowder tea. In Chinese it is referred to as Qiuo Xing or ball shaped oolong.
Why is tea rolled? The functional aspects for rolling tea are that it travels better and the freshness is sealed in. Not enough can be said about this. The aging process is slowed down and this is what you want to gain from processing. Processing of tea is, in a sense, a chance to capture a particular flavor. By rolling the tea and rolling it tight, and by roasting on the outside, around the outside... this allows for us to experience the freshness as the round bud blooms into the dancing leaf.