Not an expert but there I have used mostly two ways to cut down video.
One is "start select" and "end select" and "copy selection" in upper right corner and it creates another file in AH film directory. When creating an AVI I use Cinepak codec by Radius and 100% compression quality.
The other is "set up camera shots" Most important thing here is not to have save as AVI box ticked when doing certain changes because it immediately crashes. Changing from fixed view setting to other view (external for example) without closing film viewer made the AVI all messed up too. Again Cinepak codec by Radius and 100% compression quality. watched this tutorial about set up camera shots:
https://www.youtube.com/watch?v=a8uY6m1d2Zs&t=5s.
Both methods may lose some graphics detail or have weird anomalies. When doing some view changes etc it is sometimes better to restart the film viewer, I do this a lot when editing. I had a lot of bugs and crashes when I started to use it but found many workarounds to different issues to get the result I wanted. Needs some experimenting to get the best result with your computer, I assume it is easier with more powerful machine than mine.