Paul, I interviewed the Captain of the Liberty of the Seas and I asked him how big is too big? He said that the limitations are as far as your imagination will take you, and of course it costs lots of $$$$ to build something so large. He also said he has seen artists conceptions of a floating island ship that carries 60,000 passengers, and people are taken off by helicopter and it has it's own marina for smaller ships to dock.
As I type this, the largest passenger ship ever constructed is being built right now with it's own central park down the center, open too the sky, there's an open air theater at the stern and it will rise up out of the water about 16 stories tall. The ship is called the Oasis of the Seas and will weigh-in at 220,000 tons.
Speaking of theatres, do most ships have theatres in them? If so, what is the seating capacity? Or do they figure no one wants to watch movies outside of their rooms?
Dan, Yes there are theaters on cruise ships, but they are usually fairly small and have seating for maybe 100 people. You could call it a theater, but the best term is showlounge, which is much larger than even theaters you would watch a movie in. These Showlounges have seating for up 1,500 people at a time.