The fee paid is in relation to the block size - so the larger the block, the less fee that is charged. But for a miner, that’ll still be in proportional to how much fee is being made on average. The block isn’t HARDER because there are more transactions in it.
Block size is taken from an average of 100 blocks (correct me if I’m wrong Dan) and adjusted accordingly. So the more consistent inclusions in a block, the larger the block size gets. Makes more sense as a commerce platform because a lot of actions are performed as “transactions”.
Because the block size is dynamic, there really isn’t any LIMIT to how many transactions can be included in a block. In the past, Monero has handled 10K+ transactions a day, prior to recent blocksize optimisations found in the build we forked from.
The bottleneck I’d suggest would more likely be down to transactions-per-second, literally how much bandwidth does each node have available to receive and re-transmit transactions.
I did a rough calculation in Discord a few weeks ago on this subject:
A typical transaction is around 4.5kB so from a bandwidth point of view, that converts to ~36.24Kbps per transaction.
So if the majority of nodes have an upload/download of 10Mbps, that means it could handle 275 transactions per second. If more transactions happen, then they’ll start the struggle and the larger bandwidth nodes may start to reject the smaller nodes.
In reality, most nodes are on servers with 100Mbps minimum connections.