If you are going to spend your life writing, creating a retail product, then have to use a publisher to print, market and arrange the sale of a book, you are going to feel a bit small when faced with that publisher.
But you must remember that they do this for profit.
As a new writer, they will be taking on a lot by taking your material and publishing, but thats their business.
You should never have to pay for anything more than the costs of getting your manuscript to them, or travelling to meetings, phone calls, etc.
Charges to work on your material, by themselves, is not right.
If they say your work isn't good enough yet, if several publishers say the same thing, you might want to get outside help from a 3rd party. Any company part of the publisher shouldn't be considered a neutral 3rd party, so monies involved should be looked at carefully.
Luckily you are reading this through the wonders of the internet and groups such as above, plus other communities, are available with some simple searching and are their to protect your rights and give advice so you don't fall into naive traps as you step out into the unknown.
If you don't understand something, ask around. If you are offered a contract, go pop into a solicitors/lawyers and pay them for some advice, the investment is worth it. Just treat it the same as calling out a specialised car company to go over a secondhand car you are looking at buying, a specialist can find things the layman can't!