] ...Can anyone help me explain why Jane Austen's novels (and other novels of her day) were published in multiple volumes?.... Was it to keep the books small for easy handling in the sitting room in the evening after dinner?

I suspect the above surmise is the correct one. Novels were not necessarily written in three volumes only, however. Each volume of the novels of Richardson, Radcliffe and Burney would have been HUGE if they'd only been published in three volume sets.

In my library of antiquarian books, I've got a NINE volume set of Clarissa, a SEVEN volume set of Sir Charles Grandison, a FIVE volume set of Camilla, a FOUR volume set of Pamela; a FOUR volume set of Udolpho (second edition!) as well as multiple volume sets of more obscure works from the Regency or before: FOUR volumes of The Pastor's Fireside; THREE volumes of Lady Palmerston's Daughter; THREE volumes of Granby, etc.

Each of Richardson's works tend to take up around eight to ten inches of shelf space, so they couldn't possibly have been published as single volumes. Aside from the sheer lenghth of the novels, the actual paper of the period was much thicker, which might explain in part the larger size of the books. It had a high hemp content and feels closer to cloth than to paper.

But aside from the convenience of smaller more 'portable' volumes, as you rightly pointed out, I can imagine that writing your novel in volumes added a structure to it that it would have lacked otherwise. Interim volumes tended to end on 'cliff-hangers' which would encourage readers to continue onto the next volume of the set.

Off the top of my head, the most obvious way this is used by Jane Austen is in MP where the first volume ends with the words:

. They did begin -- and being too much engaged in their own noise, to be struck by unusual noise in the other part of the house, had proceeded some way, when the door of the room was thrown open, and Julia appearing at it, with a face all aghast, exclaimed, "My father is come! He is in the hall at this moment."

Can you imagine anyone not wanting to get hold of Volume Two at that point???