That's what we get for letting every person having a damn backstory and everything. Most dirt-poor peasants don't have that interesting a life u know.

More people are confirmed from what I've heard their will be "Travelers" walking around. You just won't be able to talk with them. Which is good I prefer having lively cities with 200+ each than having cities with 50- people 70% of them which only give rumors nobody cares about.

Overall I'd say bigger is better. TES games generally have problems with population size. This especially hit me in Oblivion where all the 'cities' had less than 50 people, save the disturbingly sterile Imperial [capitol] City. I want to walk the streets and see crowds of people (all with unique names, none of that 'villager' junk). Overall I'd say Balmora was one of my favorite cities in a TES game, and even that was pretty barren. Vivic had a decent population, but the structure and size made that too feel rather empty.

Of course each city needs it's own size, population, and feel. But they all need to go hand-in-hand. Basically we need a higher people:size ratio. Your average manor home should have a family and servants all living there, not just some dude and maybe his butler. Actual medieval cities held huge numbers of people within their walls, and even more lived outside them. I've love to see a place like that in Skyrim; a city with a Keep and noble's houses within an inner wall, a busy marketplace, church, tradesmen, guilds, and a fair populous inside the outer wall, and a sprawling shanty town outside the walls housing the poor.

Basically I think in order to be a 'major city' the population has to be at least over 200 [in a video game] preferably over 300 if the cities are large enough. The important part is making all those people move about and be seen, give the city some life. The minor cities should have at least 100 people, while the smaller villages and settlements should vary more widely- though unless it is in fact a single farm, it should have more than 5-10 people.