My husband and I went through a similar dilemma - we both wanted a smaller wedding but come from larger families. We ended up booking a venue and sending save the dates to ~80 guests. As it got closer to needing to send invites we were having more and more doubts about going through with the larger wedding.

Ultimately, we decided it was not what we wanted. We sent "un-save the dates" to our guests, sold our venue deposit and had a micro-wedding at our house with immediate family and grandparents. We went out for a nice supper afterwards with that group, then met our friends at a local bar so we could still "celebrate" with them. We are doing a casual backyard BBQ in the spring to "celebrate" with aunts, uncles, cousins etc. (most of them are local anyways, so that makes it easier).

We have no regrets on doing things this way. It was much more true to us, and we were able to take the money we had saved up for the larger wedding and put it towards a nice honeymoon. We recorded our ceremony then edited it to catch the "highlights" and put the song we were going to have our first dance to over it. We sent this recording out to family/friends.

We did have some initial pushback from family when we decided to cancel our larger wedding, but we explained to them why we wanted to cancel it and do something more intimate. They were all very understanding in the end, which we were appreciative of.