Is a freetext field the same as a freeform field? Neither of those are valid terms in databases or Crystal, try to use real terms. Also I'm not sure what you mean by "paragraph spaces.", and then you say "blank lines", be consistent, and again, use real terms, there's no such thing as a paragraph space either.
If it's a memo field (right click the field and select browse data to learn it's type), then you should just place the field and then right click it and select format field and choose Can Grow, it will grow the section as required, no need to resize the section manually.
If that doesn't resolve, try giving an example of what you mean, do you mean that the text itself has numerous blank lines within?
Perhaps you can use a replace function in a formula and use the formula instead, such as:
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