I'm not trying to be a jerk here, but this is an incredibly glib oversimplification of design. It's pretty pervasive too, especially in FOSS, which is why FOSS interfaces often suck so bad.
Not all coding is software design, and not arrangement of elements in an interface is interface design. If someone is taking an interface and making it "look nice" by removing beneficial components, then what they are doing is not design. Design is a process and a mentality, not a singular activity.
What you describe as the hard choice is merely a point (not even an extreme one) on the spectrum of what constitutes interface design. Broadly speaking, the first step, always, is to figure out what the user's goals are, to whatever extent possible. You might be able to do in-depth user research with focus groups and eye-tracking and put together user stories with A/B testing etc. etc. etc. You might only be able to do some personal research and play around with the software a bit and draw some diagrams. The second step is to figure out how you can help your users accomplish those goals most effectively through the arrangement and functionality of the on-screen elements. Without your primary concern being what the user actually needs, you're just decorating, or maybe organizing.
Reducing the amount of data on a screen isn't a end in itself. If it contributes to the user performing their task better, then great. If it inhibits it, it's the wrong choice. Any person with formal design training should be perfectly comfortable arranging a large amount of complex elements and information on a screen in a comprehensible way. See magazines, train timetables, newspapers, etc.