Application systems are unforgiving about file size and say nothing useful when they refuse. Getting under the cap is usually easy once you know why your file is large.
A two page CV exported straight from a word processor is usually well under 300 kilobytes. If yours is five megabytes, something in it is an image: a headshot, a logo, a decorative header, or a design template full of graphics.
Compressing turns pages into pictures of themselves, which makes text stop being selectable. That matters here more than almost anywhere else, because many application systems scan your CV for keywords. A CV that has become an image can read as blank to them, and you will never be told why you heard nothing.
So for a CV, try the gentle option first and check the text still highlights afterwards. If it does not, go back and replace the heavy photograph with a smaller one instead. That fixes the size at the source and leaves your text intact.
Portals cap uploads to keep their storage manageable. The number is arbitrary and varies by employer.
It can, if it turns your text into an image that automated screening cannot read. Check that text still selects after compressing.
No, which is worth something given how much personal detail a CV holds.