The type must be justified. A word is spaced to fill the line up when type is justified. Fixed word spaces are used with some adjustments for flush left, ragged right. Equal dead space is set on both sides to centre text.
The spacing systems were very well developed and an amazing amount of flexibility could be achieved when type was set in metal, including kerning and even indenting into margins.
Optical spacing between words was common practice, at least for fine typographers. I have yet to see a computer set text that equals a carefully set page from foundry or hot metal type.
The type case below the stick is a California Job Case. This arrangement saved miles per day of hand motion.
Book type cases were different. The lower case would have the lowercase characters with larger compartments. The upper case sat back upwards and above the lower case because capitals were used less frequently. Hence the name upper and lower case is the terminology used even today.