Spacing issue on sidebar

Hi @robotjackie,

I hope you are well today and thank you for your question.

The spacing is displaying between the sidebar list “test” “Hello World!” because of the following CSS code defined in style.css file of your Twenty Twelve theme and it has nothing to do with Custom sidebars plugin.

.widget-area .widget p {
margin-bottom: 24px;
margin-bottom: 1.714285714rem;
}

Either remove the above code from style.css file or add the following CSS code in your site using any of the following plugin which will override the above code.

.widget-area .widget p {
margin-bottom: 0;
}

http://ww.wp.xz.cn/plugins/my-custom-css
http://ww.wp.xz.cn/plugins/simple-custom-css
http://ww.wp.xz.cn/plugins/imporved-simpler-css/
http://jetpack.me/support/custom-css/

Cheers.