No, packaging file into MKV container doesn't reduce the size of the file, unless you're removing tracks, subs, etc.
There's plenty instructions to use these programs. They are very simple with very few functions - not complicated at all. Install them and you'll see. If you will install them and open, you'll find help within the program.
Now, about m2ts file. Is this a stand along file or is it one of the streams in BD container? If it stand along, you have a few options:
1. You can package this file into BD container using tsMuxer, and then, reduce it to 5 or 9 Gig using BD5 or BD9 function within Blu-ray "main movie" option in DVDFab. It would still be BD package and you can re-package it into MKV using MakeMKV or similar program.
2. You can extract tracks using HdBrStreamExtractor (you can extract video track as MKV, and audio track as, say AC3 640Bit to get rid of HD sound). Than, you can re-mux all tracks together using MKVmerge.
In any case, when you get your use to be m2ts converted into MKV file, it still be a 20 - 25 gig file. depend on how many track you will remux. However, you can now encode this file into smaller MKV using variety of programs, i.e. HandBrake (this one can only take AC3 audio, no DTS), MeGUI (my favorite), XviD4PSP (this one very useful for all kind of decoding and encoding).
Also, when encoding, be ready and patient - it takes forever - 15 - 25 hrs to encode one movie.