Sounds like a job to be centered around HTML::PrettyPrinter amongst many other modules on CPAN that cater to "tidy markup". I'm not familiar with vi scripting but considering that it's quite agile, you shouldn't have a problem interfacing a vi script with a custom perl parser cum beautifier using HTML::PrettyPrinter.

If it's just a few files that need modifying, I personally would just apply some elbow-grease - print out the HTML in $display to a seperate file, tidy it up with PrettyPrinter and copy it back into a heredoc, etc. I know if goes against a perl programmers virtue of laziness but I'd also consider not having a degenerate flexor. :)