Just a note -- built-in file sharing in System 7 has a limit of eight connected clients (or maybe 7).
I do not know about File sharing, but in the community I ran in the 1990s, I had 32 Macs of various configurations, a mix of System 6 & 7. In the schools I worked at also had Mac Labs on PhoneNet (before they upgraded to EtherNet) had about 35 networked Macs of Mixed Systems. In these set ups, there was an AppleShare Server on the network with a few Laser Printers and all the machines could see them and from what I can tell, each other.
Perhaps it was one machine with AppleShare Server vs. all the machines having File Sharing on that made the difference, I do not know, but all they were able to connect to the Apple Share Server without problems... well, other than the network being extremely slow when everyone tried to access the network at once.
In these set ups, I used 4 wire twisted pair shielded Phone Cable (a version of 4 wire cat5 cable). It's hard to find and get but it was great for running lengths across the building. It held up the network nicely without dropping the signal.