To be fair, looking back it's not thaaaaat bad. Sure, there are a few characters who seem really unnecessary (like Melonia, the 3 mob girls, etc.) but ultimately the game wouldn't be as good as it is without strong secondary characters like Odette, Missy/Becca, etc. and without these characters who make the town seem busy and alive. So it's not like one could remove that many characters and quite a few of them actually became pretty popular.
Ultimately there are two kinds of players. Those who have to live through the development now and those who will play the game at some point in the future once it's "done". And I doubt many of those future players will actually mind these tertiary characters as most of them actually add something to the game.
Edit: But sure, we'll never now what would have happened with a significantly smaller cast...