Concerning question number one about the PrC's, I have no problem allowing a character to have two or three PrC's (I've only had one character with two of them thus far in our 11th level game and a character looking at a second one) as long as it is properly RPed. If the character has the proper requirements, right attitude, and justifies taking it in terms of her character, then they can have as many as they want.
I don't think multiple PrCs go against the spirit of the PrC's. To me, the spirit of the PrC's is to add flavor and options for character while making them special/unique. I don't see why a character should only have one. It is just like having two or three core class levels. For this you suffer a penalty, but it is still allowed and serves to create a character that reflects the one you are playing.
PS - I believe the class should reflect the character being played. I never start a game out with an idea on which way my PC will be progressing. I've started out a Sorceror before, ended up with a Cleric/Sorceror by the end, and *never* saw that coming. However, that was where her character took her in terms of the game and thats where I went. If I had known of a good PrC to give her that flavor of her personality, god, etc. then I would have taken it.
To me, classes and PrCs are about representing the growing character and if you need more then one to accomplish it, then so be it.
Okay, and finally on to number two (wow, didn't realize I had typed that much).
I look at it this way, for every two big bad guys out there, there is one good guy. What you have to remember however it that the good guys are willing and capable of working together. The bad guys aren't quite as cohesive. Hence, let us say an adult dragon takes over a town. It won't be long before two or three adult dragons are coming along to drive that dragon out or simply kill him.
Bad guys at that level are not dumb. They realize that they have to not only be able to take a city, but also quickly consolidate their power and secure their holdings before those damn heroes come along to kick them out.
As for having a certain number of high level heroes in the game, there shouldn't be a huge number. However, this is a game and a certain amount of disreality must be remembered. The heroes always need a new enemey and someone who could challenge them. Why? Because thats the way the game works. No matter how real of a game you want to play, this is arguably the top rule - the heroes need an enemy.
In terms of the game itself, worlds do have to have a set number of baddies. And of course you can't have five or six 20th level baddies in one general area and still maintain a semibalance of reality. That is why PCs as of 9th level have access to spells like Teleport. They aren't expected to be in the same area for the rest of their lives. They ought to be running about and finding those big baddies from all parts of the world.
But still there are only a set number of these creatures. After a while, PCs get access to spells like Plane Shift and Etheral Jaunt. Why? Because there are a lot more baddies on other planes and the PCs need access to those places in order to battle them.
And intelligent, high level creatures survive by staying low key. Sure there are a few big baddies with kingdoms and armies to their name, but a lot of them don't want to be in the spotlight. Its too much attention and attention leads to those damn heroes who always come walking along. And no matter how much bravado or sense of self-power a bad guy might have, there is still some sense that one of those groups might be bigger and stronger then he is. Hence, work behind the scenes and with several layers of lackies to hide behind.
One way around this whole problem is taking things into the political realm. When here, your enemy might be a 5th level aristocrat who you could slice down in two rounds without breaking a sweat. However, if you do so you risk loosing your lands to the King and facing excommunication from the church because that aristocrat is the King's well-liked cousin.
You mention the Story Hours and one game that has probably done this better then any of the others is Sepulchrave (damn, I've been using that SH as an example a lot lately). The SH starts off at 16th level (though the game has been running a lot longer) and it takes the PCs through political and extraplaner hurdle after hurdle. Another thing that the SH does is put the PCs lives at the center stage. The next battle against the next CR isn't always at the foremost of the PCs thought. Sometimes they are more interested in fixing a keep, trying to redeem a low ranking evil character, or something else that doesn't even demand a sword swing.
Guess I ought to get to those last few points too without boring anyone to tears (and not going off onto tangents anymore).
Having four or five 11th level cleric is an area is not too far of a stretch I don't think. I think of my game as somewhat low level magic and this is about the number of 11th level clerics I have in a certain kingdom at the level of bishops and such along with two or three others of differing religions. Something like this is a hard curve to create, but by these levels, the PCs shoudl also have access to Resurrect, even if their cleric is dead (I'm sure that cleric has some other clergy friends). In theory, at this level, the PCs are somewhat connected to their PCs and would rather see them come back then dead. That should help with that problem, but those darn PCs don't always play by the helpful theories, do they?
After that, I say it is a matter of suspending that reality for a bit to get more PCs. Perhaps the PC is a foreigner or been stuck in another dimension for a few hundred years where time passes more slowly. A PC at that level can have a more creative/flavorful history/past and be more believable because of his powers.
As for making a name for themselves, any human of 9th-11th level, unless trying to keep their existence quite, does have a name for himself. In my kingdom, they each have their nicknames within "their circles" (the church, merc groups, the king's guard, the wizard's guild, etc.) and people of similar professions know about them. Of course, about one in every nearly 800 people are that this level. once they reach about 13th level, they have people in the general populace who know about them and the bards enjoy singing about them. This isn't to say this can't happen before, but this is a round-a-bout in my world.
Concerning monsters, I can well imagine a 13CR monster is well-known. You have to remember that an imp could be well-known in an area. Of course, people don't know it is an imp, but rather some ghost or god's wrath that is striking people dead. Medieval people are ignorant of magic and how it works. To them, nearly everything is magical. They are also highly superstitious. Monsters waiting to eat them are always about and tales are told of everything, whether real or not. In a lot of ways, this helps those "legendary" creatures since their truth gets jumbles away in a plethora of other creatures and strange happenings.