I start with pretty small cells and re-pot if needed as plants get bigger. Smaller plants like marigolds can probably go straight from the small cells to outdoors, whereas tomatoes especially I will re-pot once or twice before going outside, as the plants get big pretty quickly.
Some plants (like some squashes) don't like having roots disturbed so need to be direct seeded where they're going to grow or started in larger pots (like your 2") and then transplanted outside before they become rootbound.
Technically you can put in as much seed as you want (depending on germination rates, I might have anywhere from 2 to 5 seeds in a cell), but plan on culling seedlings once they get going so you only have 1 plant left to grow per cell.