Splicing the ends has two problems. First, getting the length just right takes some trial and error and once you have it right you may find in time that it needs a little tweaking, this is simple with a knot, with a splice it would mean replacement.
The tweaking will need to be done when you change from rope to rope. The ideal length is quite different between a Fly and a True Blue, for example.
The second problem is the bury of the splice changes the rope diameter. This means you have this thick cord at the ends and thin in the middle, which tends to interfer with proper action of the hitch. You might be able to bury the tail all the way to overlap at the center of the cord, and do just the right tapper at the overlap so there isn't much of a bump, but this tends to come apart and cause lumping in time. Also, to end up with 5/16" diameter, you would have to start out with 1/4" cord which would not be strong enough.
Knots tied at the end of thin cords are not very bulky at all, you'll hardly notice them.
