The select parts scale but then I get a small gap between the bottom face of the active plank and the top plank of the bottom piece of the chest.
Hi aleem.
You are scaling towards the active element:
which is in this case the lighter colored bottom plank and to be more precise: the center of the plank:
So everything (that is selected) shrinks towards the center of that bottom plank, so also the bottom of that bottom plank scales towards that center.
as spikey has indicated scaling is not a simple concept...
it includes knowing which axis (or all 3) and what point (such as center of or edge of)...