I send all x and y to server every frame. Is it too much for sending data?
Yes.
You are instantly filling up the send and receive buffers if you send everything every frame. This is made worse if you don't limit the framerate of your game because it means that your client will just send as fast as it can, and considering all data sent by clients have to be received by a single server over the same kind of "connection" (since you are testing this locally), the server will have to spend longer and longer processing all the queued data, which is what you are seeing when more clients connect.
If you tried to play over the internet with this system, you would notice it will be unplayable because generally the internet only provides you with throughput an order of magnitude smaller than what is available on a local network.