I am of the opinion that standing in fire is bad and stacking in fire should be discouraged. Discouragement through AoE is the perfect way to do it, and capping AoE at 6 people is counter productive. There are already hard counters to spell damage in the form of spell resistance, if people want to soak up AoE, they should invest in survival. Or as a wise Bentmer once said in Telara, don't stand in the poo.
Evasion is also an option if ZOS want to make changes
In D&D 3rd edition, there was an evasion/improved evasion ability that rogues and monks gained at a certain level this ability allowed them to roll reflex checks to avoid AoE/Spells, I don't see why an ability like Evasion/Improved Evasion couldn't be placed into the medium armor passive line. Of course, the best way to combat this is to just not stand in poo or fire.