How important is the "too many on page links" factor to SEO?
The "too many links" warning is set to alert you on any page with over 100 links. The importance of this warning depends on your site and SEO goals.
There are two general guidelines I would suggest for evaluating your site:
1. Review your site's analytics reports to determine which links are not used. If users are not using the links, you should highly consider removing the link, or at least making some change to the link which would help users find it. Maybe you increase the font size, change the color or move the location.
2. Understand links control the flow of PR throughout your site. You want to use links to help direct visitors to pages which are more useful for users, or perhaps more profitable for you. You do not want necessarily want to provide a link to every area of your site on each page. The links should be helpful and relevant.
Let's say you have a used car site. You do not want to provide a link to every conceivable category possibility from your home page. If you did you would have hundreds of categories representing every manufacturer, every make, every model, every year, every vehicle type (SUV, pickup truck, economy car, sports car, etc.). It's far too much.
Determine a logical breakdown and keep your links to a minimum. You want to make things easy for users. Putting 200+ links on a page makes it very difficult for users to find what they really want.
One method of reducing links is to not offer all the sub-categories, especially when they drop down to 3rd and 4th tier choices. Another method of reducing links is to combine pages. Perhaps you offer links to "About Us", "Contact Us", "Privacy Policy", etc. You could consider combining several pages into one and thereby reducing your links.