I posted something about spacing in dialogue earlier on in this thread, but recently I went into a bit more detail on the topic and on formatting in general in a PM, and after asking the other party for permission here is the content of that PM. Hope it helps.
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First of all paragraphs are there to make the story more easy to read. They give the story a structure. As you write you have the scene planned out in your head (hopefully), but your readers don't know what to expect. By seperating your scene in paragraphs you give the reader a visual clue of when the acting person or the train of thought of the narrator is changing.
You don't usually use a line break at all except in conjunction with a paragraph. In a dialogue situation you usually use a single paragraph for the lines and actions of a single character and use the next paragraph once the next character starts to act/speak. Hence in this situation...
"Hmm.. Oh! that's Natsume and Naomi. They're over the Newspaper club at Yamaku," Misha says in an uncharacteristically quiet voice.
"They meet here a lot too when they have Newspaper business to talk about. Wahaha~!"
"Naomi is the one with light hair and Natsume is the one with t-" her voice cuts off abruptly when Shizune gives her a light jab in the ribs before quickly signing something to her.
...Everything is said by Misha, so it should be a single paragraph without linebreaks. The last bit is technically Shizune's action but it can also be seen as the reason for Misha to stop speaking, so it's okay. If you were to split that bit off in aseperate sentence, it would go in a new paragraph.
What is downright confusing is that you end Misha's quotation after the "Wahaha" and start right after with another line by her. An end of quotation usually announces that someone else is going to speak, and I had to read the line again to be sure it was still Misha.
If you want to show a pause at that point you have to explain it to the reader.
So my suggestion for the formatting of that section would be like this:
"Hmm.. Oh! that's Natsume and Naomi. They're over the Newspaper club at Yamaku," Misha says in an uncharacteristically quiet voice. "They meet here a lot too when they have Newspaper business to talk about. Wahaha~!" She pauses for breath. "Naomi is the one with light hair and Natsume is the one with t-"
Her voice cuts off abruptly when Shizune gives her a light jab in the ribs before quickly signing something to her.
Misha turns her attention back to me and continues where she left off, only in a more whispered voice now. "Natsume is the one with two different colored eyes and darker hair." She let's out a muffled giggle, probably laughing at the thought of having to be quiet.
(Since Misha continues speaking after the interruption I did split up Shizune's part to break it up a bit. Otherwise it would be one large paragraph - matter of preference, really.)
Outside of dialogue situations - when the protagonist describes something - the rules are much more fluid. You still use line breaks only in conjunction with paragraphs, but where you put the paragraphs is more up to choice. You can put them when the narrator has a slight change in topic (i.e. when he is looking around the room, then out the window) or simply to break up blocks that are too large. I usually try to keep paragraphs at around 4-5 lines maximum (except for stylistic reasons like Rin's rambles in her route).
My suggestion for the following section would be like this:
My expectant gaze is only met with a quick nod and smile from the duo in front of me. I take the hint to not push the subject any further and lean back into my seat as the two of them begin signing back and forth, apparently picking back up on their conversation that I had interrupted. I was expecting some kind of joke at my expense from the two of them, but all I received was a vague answer to my question. That doesn't sit right with me for some reason. (<-This is concluding his interaction with Misha and Shizune, so I would make it a single paragraph)
I finish off what's left of my now lukewarm coffee and begin scanning the room again. (<-Could be part of the next paragraph as well)
My eyes are soon drawn back to the girls across the room. I try my best not to stare, but people-watching was always a pretty fun hobby of mine when I used to walk the city streets while my parents were working. Their conversation seems to have died down a little, as the light haired girl... Naomi, has her hands resting on the edge of the table in front of her now. My eyes drift to the other side of their table as I study Natsume.(<-Gereneral description of the room leading over to...)
The sleeves of her blouse are pulled up to her elbows, and the bow at her collarbone is loosened slightly with the top button undone. It's a good look for her. She seems to have a similar body type to Shizune, but probably a few inches shorter and a more relaxed posture, it's hard to tell when someone is sitting down though. My eyes trace her cheek and onto her small nose which is holding up a small pair of reading glasses. She's very cute.(<-Description of Natsume)
Something instantly grabs my attention from her nose; It's her eyes. Her left eye is a light brown color, but her right eye is a smooth, almost transparent, emerald color. It's...well, beautiful, really. I catch my self starting to stare and snap back into reali-(<-More detailed description. Could be the same paragraph as the last, but the "She's very cute" is a good point for a break)
Oh crap. (<-This is an internal exclamation. To set it apart from normal narration I usually use italics)
My gaze is met by her own as our eyes connect from across the room. I feel blood rushing to my face instantly as I snap my head away as if I was just punched in the jaw by an invisible boxer. The girls in front of me have quit signing and are looking at me as though I just grew another head.(<-Could be two paragraphs but they would be very short, so I'd segue from Natsume back to his own table in this one)
As you see from the comments it would be possible to segment it differently, but this way the reader has comfortable chunks of 3-5 lines and can pause at the end of each to digest the contents if neccessary without cutting one train of thought in half.
Finally, a scene change is usually there to signify either a change of location or a time-skip.
I usually use an extra paragraph with just three asterisks for that:
...
End of scene A.
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Start of scene B...