I will try to answer this question based upon the real-life example – our band clothes selling client, who had been doing SEO the wrong way for many years before he finally realized the website can perform better and contacted us for assistance.
Our client sells 6 types of clothing of 450 rock bands. These 6 types were packed into 3 pages because this is the perfect number to ensure great user experience with the store. For example we placed hats and beanies on one page. Well, we reduced the number of pages but of course not the number of keywords to rank for.
We counted potential number of key phrases that people might use to find our client store. Since we had 6 types of clothing and 450 bands our calculation was as follows: 6 x 450 = 2700. We went further and researched other keywords that form long-tail variations and found 7 more commong words that are used alongside with the “band name + T-shirts” phrase, like ‘vintage’, ‘cheap’, ‘concert’ and several others.
Thus: 2700 x 7 = 18 900 key phrases and we didn’t take into consideration that additional keyword can be placed before the core phrase, inside it (between the two words) and after it.
So shell we track more than 18k keywords to see the website’s real performance in search? Definitely not! We counted the popularity of the “band name + T-shirts” key phrases for every band and it appeared that 30 the most popular bands will most likely bring the same amount of traffic as the 420 of the rest bands would.
Out client insisted on the manual SERPs check via VPN, so we picked up 50 key phrases to track: 30 the most popular bands plus 20 other bands where our client had a great choice of items.
As you can see, usually there is no need in checking hundreds of positions. You will most likely get lost in the data. Instead choosing the post important keywords/pages for your business seems to be really reasonable and actionable.