That's just a general statement. Lag is a huge problem on multiplayer worlds as well as single player ones on slower devices. Lag is an extreme annoyance as well as an interruption and limitation to gameplay. It is a problem that seems so unavoidable, even unfixable sometimes. People oftentimes are limited to peaceful mode render distance tiny. That sucks. But for all this suffering Minecraft players have experienced on the subject, there is a somewhat simple solution. As you may know, every time you chose to break a block, 65,536 blocks must be updated. I have a way to reduce that number to 16,384, but at a price.
The top of the buildable world is at a height of 256. Many players never even touch this level, and this whole vacant sky usually sits there, causing obscene amounts of lag. The sky doesn't really need to be that big. I would suggest creating a world type with the following changes.
1. The world height is reduced all the way down to 64 blocks.
2. Terrain is compressed between layers 8-16, not counting trees and generated structures.
3. Caves, ravines, dungeons, and abandoned mineshafts no longer spawn.
4. The floor of a desert temple can only spawn at level ten or higher.
5. Extreme hills, extreme hills M, taiga M, megat taiga, mega spruce taiga, extreme hills+, extreme hills+ M, jungle, jungle M, jungle edge, jungle edge M, birch forest hills M, roofed forest M, savannah M, mesa (bryce), plateau, plateau M, deep ocean, ocean, and hills do not spawn on worlds generated with the 'simple' world type because they are too tall.
6. Bedrock only spawns at layer 0 to allow players more space to build on. This layer does not update with the rest of the world, as it cannot be altered, anyway.
7. Leaves can only exist as player-placed. This means that they do not have to be near logs to exist, reducing lag. This also means that the player must destroy the leaves manually.
8. Only 1/40 of the chunks are slime chunks, and chunks can only spawn on layers 8 and lower. This keeps slimes from taking over the world.
9. The Nether is also reduced to 64 blocks high. This creates a 1:1 vertical block ratio. The player's distance ascended and descended in the Nether is equal to that of the overworld. However, the normal effect still applies when walking on the X or Z axis. This makes the Nether roughly half of its normal height.
10. The End portal can be found randomly on layer 1, just above bedrock. It can be found using Ender Eyes, and is just as rare as a stronghold. It spawns broken, the way a stronghold's End portal always is.
11. The End Island is thinner than usual to accommodate the height limit. The towers may also spawn rather short if need be.
12. Wells will not protrude bedrock.
This world type can make for a much less laggy Minecraft experience, especially on multiplayer servers. Although this can be limiting, it helps fix the worst problem ever.
As said, world customization is coming. This isn't needed. To to mention, you can put the render distance lower, you can use fast graphics instead of fancy, you can play with minimal particles, you don't have to use the special lighting thing (kinda blanking on the name), and if all of that together doesn't work, then get optifine.
The game already splits chunks up into 16x16x16 cubes (not related to Cubic Chunks, part of the Anvil format) and empty chunk sections are treated as just that - empty, and marked as such, as seen on the debug screen - so they impose no burden, and only chunk sections, not entire chunks, are updated when a chunk update occurs, except for lighting calculations, but that is only an issue if you decided to build at the height limit.
A better solution would be to make the vertical render distance depend on render distance; that is, the game renders chunk sections in a cube instead of entire chunks (similar to Cubic Chunks but only in rendering, which shouldn't be that hard to implement as again chunks are already split up into sections and the rendering works on those sections). This wouldn't have any effect on what you can see up/down because fog obscures what you can see anyway, nor would it increase lag at higher render distances because it is limited to the height limit (max render distance of 16 chunk sections vertically; a render distance of 8 or higher while standing at y=128 would only render that many, not render distance x 2). With a bit of work they could even make chunk sections render in a sphere and reduce lag even more (again, similar to Cubic chunks but NOT affecting chunk loading/generation, only rendering, so none of the issues with that that are holding Mojang back from implementing it).
Looks like we can choose the maximum height, if there are structures, mountains, oceans etc. I don't understand how that won't satisfy OP.
The leaves thing, just having an End Portal in lieu of a full Stronghold, and forced Bedrock to be 1 layer thick (to my knowledge the new settings don't do that). I still think it is a bad idea and admit that most of this can be done with custom terrain (and should be made into a preset), but it is still different enough that I won't lock it just yet.
If the new terrain option is good enough for the OP, I will lock it at their request.