When you add a margin, you're increasing the size of the block by that many pixels. In your case, you added 7 pixels.
When a unit is floating like that, and text is wrapping around it, the text will only move under it when it can clear the block entirely. In your case, there's extra space at the bottom because 7 pixels make the block tall enough that the text underneath it cannot clear the block + the 7 pixel margin, and so it has to go down another line before it can move underneath the block.
In other words, you added a lot of margin, you just didn't know that margins are *hard* with regard to text wrap.