Family sharing family larger than 6

You can however, make it so really small children share one Apple ID, children under 3 years of age for example can share a single Apple ID for now.

The 6 person limitation is for Apple IDs. Unless each individual child has their own Apple ID then you likely have less than the 6 maximum Apple IDs. You can set more than one device that is used for the younger children to use your Apple ID or your spouse's Apple ID for purchases which is the main purpose of Family Sharing.

As the other children get older, they may want to leave the Family Sharing group and as such you free up space for the younger ones to get their own Apple ID as time goes by and be added to the Family Sharing group.

It also allows for Apple to add support for more people in Family Sharing if they ever plan to do so.

Apple rarely justifies why it imposes certain restrictions. We're not allowed to discuss policies here except to guide people as to what they are but probably the bottom line is international and inter-company business relations. I know just sitting here I can think of a handful of reasons why this limit may be in place.

I have not seen that possibility:

What is Family Sharing? - https://support.apple.com/HT201060 - "Family Sharing lets you and up to five other family members [Apple IDs] share access"

If you wish to suggest it

Click on this link for Apple products feedback links --> http://www.apple.com/feedback/

Okay, but a person can't be a member of two families at once and there isn't any sharing between families.

The sharing of an ID is a possible workaround but remember that any purchase made with one ID cannot be moved to a different one, only shared. However, shared items can be kept permanently and only require an active Family SHaring membership to update or re-download. So in theory if you have somebody who is very good about backing up music files which won't really change, they could use a shared copy for many years as long as they keep them (this does not apply to Apple Music subscriptions!). You might be able to come up with sharing partnerships with all that in mind.

Have you tried Phil's suggestion? Just because the kids are older than 12 doesn't mean they can't share an Apple ID.