For reference you want to read this description of paragraph styles: Cocoa Paragraph Styles and note that everything in there is additional space added between lines, between paragraphs, before paragraphs, etc. You can set the values in your NSMutableParagraphStyle to zero but no lower.
To further shrink the spacing between lines, use setMaximumLineHeight, thanks to "6 1" for the code (I've add the setMaximumLineHeight):
NSString *title = @"title here";
NSFont *bold14 = [NSFont boldSystemFontOfSize:14.0];
NSColor *textColor = [NSColor redColor];
NSMutableParagraphStyle *textParagraph = [[NSMutableParagraphStyle alloc] init];
[textParagraph setLineSpacing:10.0]; // this sets the space BETWEEN lines to 10points
[textParagraph setMaximumLineHeight:12.0]; this sets the MAXIMUM height of the lines to 12points
NSDictionary *attrDic = [NSDictionary dictionaryWithObjectsAndKeys:bold14, NSFontAttributeName, textColor, NSForegroundColorAttributeName, textParagraph, NSParagraphStyleAttributeName, nil];
NSAttributedString *attrString = [[NSAttributedString alloc] initWithString:title attributes:attrDic];
[self.titleField setAllowsEditingTextAttributes:YES];
[self.titleField setAttributedStringValue:attrString];