Wow, this road grid snap is annoying right now - none of the block sizes are making any sense to me yet. I've restarted about 10 times now just trying to figure out what they had in mind for the alignment of avenues and streets
There's apparently two grid sizes (as in, the distance between your original road and the next road parallel to it that the game tells you to use): One for roads and one for avenues.
The game will show you grids for the last two roads you moused over: If it was on top of a road, the "grid" will be smaller (as in, the dotted line will be closer). If it was on top of an Avenue, there will be a bigger grid (as in, the dotted line for the next road will be further away). I BELIEVE that the dotted line will be of different sizes as well.
HOWEVER, if you make the grid as they tell you on the smaller roads, you won't be able to fit high density industrial buildings in it (and maybe not even residential ones? I only went to medium density on those). You'll have to bulldoze the road between two zones (making a bigger zone). In that bigger zone, high density buildings will be able to evolve.
That's all I got so far after two days.
Edit: one easy way to see this is to select the road tool, mouse over an avenue and make a road on the dotted line. Now, mouse over the newly created road and you'll see that there will be new dotted lines to both sides of the newly created road. The one on the side of the avenue will be smaller than the gap you just created. If you build that road, there will be a 1 house space between the newly created road and the avenue, and that region will never have space to evolve into bigger than single, low wealth houses.