As I said, I never suffered the gross misfortune of having to use one. But I don't see how white-out would help if you omitted a word or two. I guess you could white out the entire line and hope there is enough space in the marginor white out the entire paragraph, and hope (in most cases, with more confidence) that there is enough space in the sum of the remaining margins.
In the above paragraph, the "in most cases, " and "remaining" bits were added at the end. I doubt it would be pleasant to make that change on a typewriter.
Generally you didn't start typing until the paper was
done done. Like others said, you had white out or a second white ribbon to type over the typo or whatever...but for the most part you were just really, really careful when typing. It was a serious pain in the ass, but it was all we knew. Word processors were out by this time, but they were expensive for a High School kid (as were early PCs).