Need 240V in the shop, is it already in this OLD panel box?

I thought with higher voltage (220 vs 120) that smaller gauge wire was OK, isn't that why large power lines are super high voltage, so the lines can carry more power safely?

your correct the wire size is what determines the amps that it can safely carry without overheating. Now in free air the amp rating on the same size wire goes up. Romex and THHN etc. are rated for 600 volts. The higher the voltage the lower the amperage for a given load.