Yes, to update a style you can:
- Apply the paragraph style you want to edit to some sample text in the editor.
- Adjust the spacing for the sample text via
Format ▸ Paragraph ▸ Line and Paragraph Spacing...
- With the insertion point in that paragraph, select
Format ▸ Style ▸ Redefine Style from Selection...
to update the paragraph style.
You may also want to check this post and following for more discussion on paragraph spacing within a block quote.