the large space between the level 1 and level 2 menus is because of line 163 in menu.css
ul#cssmw_content ul.level-2 {
left: 149px;
}
the width of the level 1 element is 100px.
try changing the width of either, (increasing the width of the parent, or reducing the left offset above, so the child elements are offset by the width of the parent)