When one rents out rooms in one's home, doesn't that make one a landlord? Communities have all kinds of specific laws and regulations governing rental properties and landlords. In our community, we are not permitted to rent out rooms in our single family homes. I would think that most communities have similar restrictions.
As to the laws regarding number of occupants in a dwelling, renting out a room,etc... Welcome to the Balkanization of America. Those laws only apply to certain ethnic groups. To make efforts at enforcing those laws, is only an "ethnic assault".
The real risk is in the homeowners insurance coverage. Use of realestate other than what is in very narrow scope in your policies, really lowers the integrity of the issuing insurer. A home with 14 people in it, has a much greater risk factor than one with a single conventional family.