I chose to have an alphabetical label cloud - because I think it makes it easier for people to find what they are looking for. But it is, of course, a matter of personal choice.
Luckily you can restrict the numbers of labels that show in your cloud or list - this will not in any way affect the other labels' effectiveness for search engines etc.
To do this, you go to your Dashboard. Click Layout and then click edit on your Labels gadget.
You will see under Show the option to show all or select which ones to show. If you select then you can go through and just tick the main ones - but don't leave it there - move down and click the orange Save button or all your work will be wasted. It took me 3 goes to realise this.
And you can go back and revisit this whenever you want.