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Okay, so I kept getting the "we need more of 'em" message from Phyllis? and so I planted as many as I could...then I got the "there's too many...maybe" Should I cut some down? Or cut one, go talk to her...cut another...go talk to her?

How many trees should a town have? Does it matter where they're placed?

If there's too many, it means that the trees are blocking the paths of the animals, so sometimes it is a matter of placement.

What she means is that it's uncovienent or makes anyone like the player or the Animal to walk around it when it doesn't have to. Just cut a tree where you belive this may be a problem. Having not enough trees is actually better than having to much trees because you may cut down billions of trees before actually comeing across the right tree to cut down and then it's too late.
You can't really have too many trees, as long as they don't get in anyones way. You could be a finatic and cut every single tree down and plant new ones perfectly across from each other kinda like a grid. What I mean is planting a tree and having enough space between another for a single fruit to land there. Like this T means Tree and O means an empty space:

O O O O O O O
O T O T O T O
O O O O O O O

Erh, kinda like that but starting from one corner at the top to the oppiste side and the bottom. So yeah. I didn't do mine like that because it doesn't feel natural, but a friend of mine did and got his town perfect. I know there are rivers and such in the way, but this will do it.

Do some rearranging, the tops of the trees shouldn't touch eachother.