The real problem is two fold and it's an issue with the writing and booking not the size of the roster:
1. The idea that all feuds must be continued on Raw and Smackdown, EVERY week, culminating in a match at THAT months PPV.
2. The idea that one talent can only have one feud going with one other talent at a time.
I.e., instead of X only feuding with Y and Z only feuding with A, you can have X feuding with Y and feuding with Z, Y can be feuding with Z and X and A, A can be feuding with Z and Y and B, and so on. You don't necessarily have to address each feud every week or monthly PPV either. Not only does this increase the amount of talent getting exposure but it also increases the potential length of all the feuds as well as the matches and match combinations you can have over a longer period of time.