I admit I have used both of these with my kids, but I treat them not much that differently than you talk about spanking: as a last resort for particularly egregious or pervasive misbehavior. But, even then, I try to do them in a way that allows them to be a character-building opportunity. Typically, during time out they are asked to reflect on (a) what they did, (b) why it was wrong, and (c) what they can do next time to get the desired result in a morally acceptable way. "Grounding" is usually limited to a specific privilege or set of privileges, usually electronics (TV, video games, etc). The point is to remove them from something they enjoy, but also something that has a corrupting influence on them if overused. I have found that it teaches them both consequences for their choices and how to enjoy themselves in more healthy and productive ways. I have only ever grounded in the more typical sense once, and that was when my daughter was developing a hitting problem, so she was grounded for a week from going to the house of a boy she had hit, so that she might learn that mistreating people has a negative impact on relationships.
Granted, my kids are a little bit of a special case, because they were horribly abused before we adopted them. Any form of corporal punishment that we could dish out would pale in comparison to the abuse they endured and would very likely cause them to relive terrifying memories. But, I am pretty sure that, even if not for our children's history (and in the case of our youngest who was removed in very early infancy), corporal punishment is not something I would use. I just don't think it accomplishes as much as other types of consequences would.
Be careful not to confuse punishment and discipline. Discipline is the act of teaching proper morals, ethics, and behavior. It's main goal should be to build character. Punishment is but one tool used in discipline and one that I think should be used sparingly.
Some people who spank do use it excessively. Some don't. I am sure we have all seen the angry mother or father in supermarket who picks their kid up and gives them a swat on the behind for every minor indiscretion. I am not going to pretend that these are the norm, but neither am I going to deny that they exist.
This is all sounds very one-sided to me: YOU spank, and then YOU explain why their behavior was wrong. Wouldn't it be better to give them an opportunity to think out for themselves (with the guidance of a loving parent, of course) why their behavior was wrong. I have found that conversations tend to be internalized better than lectures. And, isn't that what we really want: to have our children internalize and come to sincerely believe that healthy choices are better than unhealthy choices?