I really like the idea of using smaller towels. I am going to suggest this to DH as we don't have anywhere in the bathroom to hang towels. They get draped over the shower curtain rod right now. I have hang-ups about hanging towels above the toilet because so few people (my DH included) will put the lid down before they flush. That is unfortunately the only wall space in the bathroom. And that is a topic for another thread...
Anyway, I keep a laundry basket in the laundry room for dirty towels. When it gets full, I run a load. We change bath towels every 5-7 days, kitchen towels and wash rags daily. I run a separate load for towels because, like a pp, I wash and dry them on hot with no fabric softener. If we've had overnight guests or illness in the house, I will use a detergent with "bleach alternative".
When I was growing up we had neighbors with 7 children. They each used a towel once and dropped it on the bathroom floor. Their mom would go around and collect them all and wash them every day.
: Can't imagine that.