I hear that everyone pretty much always uses RSO when playing. What does it exactly do? Richer & bigger patches of ore?

Please take a look at information page and let me know what kind of information might be missing from there.

Can't you just do the same thing with settings in game? Like less resources but richer and further away and richer?

K

You can do the same with game settings but not to that degree. After last in game generator upgrade (it was in 0.17 I think) you can get close to basic RSO settings with in game settings.
RSO will still have resources more spread out and I think still has higher richness changes with distance then base game.
Additionally RSO will try to prevent ore patches from overlapping when possible.

Thank you.