lines dont matter
from what i've heard from my teachers (several who are hsc markers in subs like eng, german) is that the process regarding lines and other work etc is that pretty much anything you write will be marked, unless its crossed out into oblivion.
technically, today before eng2 we got told that we can write a plan or notes on the opposite, unlined page, but advised strictly not to write parts of our response there. if u dont want them to mark ur notes, cross em out.
tho our eng teacher rattled out a story about some chick who wrote an essay plan down and not long into her response, proceeded to vomit up all her breakfast goodness all over her the proper response, but cos she had a plan, they looked at it and were able to estimate her mark and etc etc all cos she had a plan..
in relation to the outside the lines in sub's like german or whatever that give you a set amount of lines to answer each response, generally these lines represent how much space is needed to make a clear and concise answer hitting all bases. however most ppl tend to waffle or whatever and not get enough meatiness to their answer, so thats why if u fill up all the lines, but dont feel like youve said enough, GO ON. it will be marked. my german teacher (senior hsc marker) says that they get these brill responses that get band 6's but theyve got asterisks and arrows and shiat going all up and down the sides and in between the pages with extra stuff.
the only worry with writing everything u can think of is that u may tend to write shiat that will contradict yourself earlier on.
so if u write novels (like myself here) in an exam, just make sure it all makes sense. also u may inadvertantly be answering part of another question in ur answer, and they WILL award you marks for it if u dont necessarily put that info in ur other answer for the other more appropriate q.
hope that helps