The way windmills work is they need the center square to be outside. As long as the center square is outside, the rest can be underground. Thats the idea behind my tower, it overlaps them on Z levels but still leaves the centers open to air. All the shafts going up to the surface are the center of a windmill below, capping them off with a constructed floor would shut off power to that windmill.
I can't see a way to get it any more compact, really. I also use a 2 level design that is a little bit less compact but still produce a lot of power and is easier to build. I just have windmills in rows with 1 space between, and in that space theres a vertical axle that allows windmills to be built on the level above, overlapping the edges.
Building such a complex windmill as the one in the example isn't actually that hard, though. For a surface construction you just have to build a couple of rows of up/down stairs leading to the top, build all your axles, then start building the windmills. I work from the top down for the windmills, deconstructing stairs as I go. Once I reach the bottom I can remove the rest of my stairs and have the structure completely supported by the axles.
I usually build the smaller 9x9 version, though. I actually have no fort currently using the behemoth I built in the example, I just built it as a quick example to show the concept. Even on low wind maps the 9x9 gives you 321 power, which is enough to power a good sized pump system and still have enough left over to pipe it over to your grain mills.
If you built the large version on a high wind map, I honestly don't know what you would do with the 1604 power. The only way you could use that up would be to have gear boxes and pumps and shafts all over the place. When more mechanical devices that use power are implemented it will become necessary to build such large power generators. For instance, if traps all required 10 power, players would need a good sized generator to power the standard trap hall setup.