Protecting Web App Code

Googling ways to protect source code brings up 2 options to secure code:

1. put in spaces at the top of your HTML script...
2. obfuscate with javascript, but this can be decoded

Is it possible to design a webbsite/webapp such that the front page calls functions and scripts that operate in the background on the server and then return the result to the display page?

Designing my software for web delivery was recommended to me from my previous design house over a desktop application. They indicated that web is actually more secure because users cannot get at the source code unless they hack the server.

I am assuming there must be some way of protecting methods, or how does anyone deliver an engineering product over the web?