So I have completed the butterfly and shells collections, and the messages says my population limit has been increased, yet I cannot make more babies -> "you have no more housing". I looked for a spot to build another hut or upgrade my current ones but there was not spot. Now today I was playing and some villagers had died so I was making more and somehow I got 42. I think it was triplets but I am not sure, and I still get the message that I have no more housing room. Also there needs to be a way to get the last couple items 'cuz I have had one pebble (rare) and one beetle (uncommon) to find for almost 4 real life days now (2x speed).

The increased population messages from the desktop versions were inadvertently left in the iPhone version and will be removed in a bug update. The maximum population is 40 under normal conditions, 41 or 42 with the birth of twins or triplets.

The collections are difficult to complete, and it's not likely that you will find them all in a few days. It depends somewhat upon how long and often you play, and some players have reported working on them for a couple of months before completing them all.

why cant we have an increased amount of villagers as well? instead of taking the messsage out let the iphone users have more population as you need an incentive to finish the collections

The iPhone can't handle a larger population without causing performance problems. We allowed as many villagers as we could.