What tool(s) and steps to edit the AVIs from WinDV when digitising VHS tapes?

I'm about to start digitising a bunch of family home videos. They will be captured through WinDV, so will end up as fairly hefty AVI files.

What should I do with them after?

I have the space to keep the originals. While I'm not worried about any AI upscaling or stuff, and I don't need to worry about deinterlacing (I think, correct me if I'm wrong), my only real aim is to make them smaller. 14.7GB an hour for stuff my parents will end up trying to stream down their crappy broadband ain't gonna fly.

So what's a quick and easy tool to make these smaller, and possibly repackage as mkv, for a complete noob to all of this?

Thanks!