The Grid popup edit form normally does not use an iframe. It is true, that the popup edit form content container does not have side paddings, but the label and textbox containers do have them. Moreover, they are aligned in such a way, that there is even more spacing towards the edges of the Window.
I am not sure what do you mean by "fixing the default look". In my opinion the default look of the Grid popup edit form is OK (attached screenshot). Let me know if you need more information.
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