I've been with Etsy for over two years. I don't think I will ever have over 100 items in product, so can't answer that question.
As for tags, I too have read that short phrases are better than single words. When I started out and wasn't sure about tags, I looked at the tags of my competitors, especially those that seemed to be doing well. If they had a tag that would work for me, I used it. I also searched for my items by doing an Etsy search, using words I thought people would use to find my items. If nothing showed up in the first ten pages, I tried to fix my title, description and tags. They all work together.
Good luck to all of you!
BC