Besides mastering the material in the course one thing that the students have to learn during studies is to communicate mathematics in written form. Almost nobody comes to university and is able to write clear proofs or mathematical arguments. You need to communicate that this is part of what they have to learn.
You may grade as harsh as you like if you are willing to engage into discussion about your grading. When I had messy sheets and graded harsh and these students came to office hours we usually had good conversation. More often than not the conversation goes roughly like:
Student: What I mean here is X.
Me: I see, but that is not the right argument at that place.
Student: But at this point.
Me: Right, a similar argument would help at this point. But yours is not totally correct.
Student: But this (slightly different) argument works.
Me: At this point the conclusion is not clear to me.
Student: But it is clear from Y.
Me: If it's clear from Y, write that it is clear from Y. Conclusion: If something is clear, write it down clearly. Moreover, you wanted to write Z at place B and not X at place A. So please write that down in the first place next time!
Student: (Leaves with new insight but the same grading… In most cases happy.)
The sheets got a lot less messy next time…