After SGEN, as mentioned above, what else do you want to do? The support packages are there to (a) fix known issues, and (b) can include new or extra functionality. Unless you are particularly looking to use the new functionality, then just continue as you were before.
If this is part of a landscape which is productive, then your testing team will want to run through their regression tests in DEV or QAS to ensure that the key business processes still work as before. Once they have signed things off then you are free to roll the patches through the landscape to Prod.
As Siriam says, you must run an SGEN after patching or upgrading the system. When you come to apply an Enhancement Pack one selection option is 'do you want to run SGEN now or later', so it's a basic thing to do and speeds up the system for the users.
Don't worry about space in the DB being used - just SGEN pretty much everything. I usually do the lot now.
Bear in mind that if you are having additional languages in the system other than the standard SAP delivered languages (English and German) then you will need to consider Language Supplementation.
Also make sure you get the SPDD and SPAU phases done during the patching process.
You execute SGEN after the SP upgrade to get a smooth execution of the transactions, else users will complain in delay of the processing of the transactions as system will have to recompile every transaction during the execution.
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