The population limit on most devices is 65 villagers. The message that you get when you reach the limit is a little confusing and will be changed for the v1.1 update.

Unfortunately, you won't be able to complete Puzzle 12 without a master builder. You can get additional training for your builder if more debris washes up onto the beach. That puzzle is being reworked for the update, so that there won't be a dead-end if you don't have a master builder when you need one.