I'm not sure about the size issue as I don't have anything that big up - yet
However, the HTML issue has a workaround. As you may well know, all you need to do is correct the "up" links (no pun intended) in the original HTML. I'm not sure why the link is not correct, but when I clicked the "up" link on the web page, I got the same error as you reported, because the original TOC is an shtml, but the link is to a non-existent html page.
I've only done about 100 photos so far up to the web with P2W, so nothing too big. Sorry I can't replicate the experience you're having, it works fine for me at this number of photos.
Keep us posted and best of luck!