I don’t think you can control the temperature well enough with a rocket stove. It is usually a pretty narrow range and fairly low temperature.
What you are talking about is plastic injection molding though something more like this:
A lot of people 3d print instead, and there is a filament extruder you can make for that as well. There are a couple of instructables for it, but IIRC the plastic caps work better for 3d printing.
To reduce volume, usually you sort it, clean it, dry it, then shred it into smaller pieces. I haven’t seen a really good small scale plastic shredder.