Clearly some of you have actual linen CLOSETS
I could never squeeze too many of any of these things in my small house. My main goal for cutting out the extra is to make my tiny house livable (and comfortable) for 6 of us in the long term.
I figure I often have a basket of towels that doesn't get put away until we have already dirtied a new load. That means I have a full load too many. I always wash and replace the sheets the same day (or again they sit in the basket way too long) so I can do without. We have gone through a stomach bug recently and didn't need extra, so I don't want to keep extra around for the once or twice a year they may actually be useful to me.
We have never used paper towel and don't use napkins at the table for most of what we eat, so a flannel cloth has worked just fine. I don't think I will get rid of any except those that are old and full of holes. Rags I will maybe just toss the extra in storage so I have some when my current supply gets worn out. We use those for messes and water spills.
Dishcloths, one per day of the week of each a wash cloth and a dish towel should be sufficient. I do laundry daily anyway, so this system should work better for me than having extra and just letting it go unfolded for days at a time.
Thanks for all the input, it has really helped me clarify what will work for me!