Ahh, weddings. I am getting married this summer so this is a topic that's currently on my mind. I totally feel you on being overwhelmed at the thought of organizing/hosting/paying for a large event. Spending lots of money is stressful, especially when it's for something so transient ... I think a lot about how I'd love to invest all that money instead of paying for a wedding.
That said, we're not actually eloping (or going to the courthouse), and our wedding will be pretty sizeable: about 100 invited (he has a lot of family, I have a lot of friends). I dislike wedding planning & all the money it'll cost ... but for me, everything really came down to the fact that we're so mobile now and people you love can and do move (as do we individually). My fiance and I are from different states, went to a third state for college (same one, but we ran in different circles), then I moved to a fourth city for work for 2 years, and then a fifth city for grad school. And our friends from all of these places are in different cities now too. I have friends in Cali that I haven't seen in over a year because of geographic distance. So I am really embracing the opportunity to get all my favorite people together in one place, which, let's face it, will probably never happen again.
But of course, the reality is that while all I want to do is get married outside in a beautiful garden, provide guests with food and alcohol, and have music to dance, all of that is coming at quite a large cost (~15K, we estimate), so it's a big luxury and totally unnecessary for getting married. Just keep that in mind whenever someone says you 'have' to do something -- actually, nope! Everything is elective, besides the partner, pretty much. One site to check out is apracticalwedding.com -- it's amazing, thoughtful, and really focuses on marriage and life, rather than petty details of wedding planning. They talk about things like the experience of having your mother, an alcoholic, get drunk at your wedding, and lots of other thorny and very interesting and personal topics. Great place to hang out to start unpacking your own feelings towards weddings and marriage.
So I think your issue really comes down to: WHY do each of you want what you want? Do you want a really small wedding because it's cheap? Or is it more that you want it to be a super-personal experience? Does he want a large wedding because it's expected? Because he wants there to be a lot of love? Because he wants to share it with a lot of people?
Question: if you were inviting a friend and they had a long-term SO, would you invite the SO just to make your friend happy? I find it gets tricky there, because some couples I am friends with, and some couples I hardly know the SO.... but I don't want a friend of mine to feel shafted. Thoughts?
So when I started planning, my perspective was very much that engaged/married couples you need to invite the partner (or people who have been together really long-term ... went to some weddings when my fiance and I were bf/gf where the bride and groom had been together less than we had ... would not have been amused if bf wasn't invited.) So I totally primed my friends in medium-term relationships with the fact that we wanted something pretty small, probably wouldn't be able to give dates, and they were cool with it -- We're only inviting close friends and family, so everyone knows someone, or a large chunk of someones, usually.
But then I thought about it -- I only want the really important people at the wedding (why focus attention away from those VIPs and put it towards others?), so if a friend was important enough to invite, shouldn't I care so much about them that I want to get to know their SO even if I haven't yet? So I actually think I will be inviting everyone with their medium/long-term partners. (Basically, we'll have been engaged for a bit over a year when we get married, so if your relationship was long-term when we got engaged (say, ~1yr at that point), your partner is invited.)
It's actually a great litmus test -- there were some people who I thought I would want to invite, but then when faced with having to invite their partner, if I really didn't want to, that was a great way to realize that I'm clearly not as invested in their personal life as I should be if they're one of my most favorite people.
Good luck!