I'd think you need just the first inside page of the V.5 headed in the top left "UK Registration Certificate Vehicle Details". Scan it at say 200 dpi to get decent legibility ... but as you have probably discovered that's the easy bit. I use Photoshop a lot and also have an "Image Resizer" download and am quite experienced with both, unfortunately resizing is normally done by adjusting the image dimensions in pixels, the scanning dpi rate or by setting a degree of compression ... NOT by telling the software what file size is eventually required. Getting the result you want in terms of Kilobytes while retaining legibility is a real challenge. I've been experimenting with my own V5 and it's a bit like pinning the tail on the donkey blindfold.
The recommended 'Image Optimizer' link to be found here http://www.imageoptimizer.net/Pages/Home.aspx works in just the same way. I scanned my own V5 and the original document was 1653 x 2336 pixels using 755Kb, I ran it through the optimizer reducing the size to 849 x 1200 with resolution set at 'normal' and the darned thing came out BIGGER at 958Kb. That's NUTS ... and I now absolutely understand your frustration.
I eventually cracked it in Photoshop by getting the image on screen in full 755Kb resolution. Pulled down 'Save As', selected a new file name, hit 'save' and adjusted the quality to 'low'. The saved image came out at 166Kb and was legible. If you can't sort it out yourself, and if you can find a way of emailing it to me or sending me a link to a cloud storage location in a PM, I'll get it fixed and send it back. Remember to state the file size required.