Device Limits
BLE shares the same 3~4 real-device limit as Bluetooth. However, if that were not the case, then Nearby Connections is programmed to attempt to upgrade as many devices to the higher bandwidth WiFi connection and any remaining devices will continue to be connected over the lower bandwidth BT connection.
WiFi LAN
Nearby Connections will utilize the router if it's available to both devices. During the initial advertise/discover phase, it uses mDNS to scan for other devices on the same WiFi network (a Bluetooth scan will happen concurrently, and results are merged). After the initial connection, if it connected over Bluetooth, it shares the SSID of what WiFi network you're connected over and, if both devices are connected to the same SSID (and are reachable), it'll attempt to use that connection instead of setting up a hotspot (since it's less disruptive). It then enables TDLS so that the devices can communicate directly with each other, instead of hopping messages through the router.
Disclaimer: I work on Nearby Connections
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