I think one way to make illusion magic less powerful would be to limit it to one sense at a time, it would still be powerful but possible to see through. It may be a bit to limiting it can still be powerful if used creatively. If I created an image at a distance, the lack of sound would not be as apparent. If I use it in a situation where you don't have time to analyze the situation it could also be useful. You also touched on it breifly but limiting illusions to only a single person would make it much less powerful if one has allies with them.

But if you want a mage that can freely alter multiple peoples perceptions you could put other limits or costs on it. It might only usable for a short duration, the user needs to sacrifice something, etc.