Thats too vague to say...

It works but it lags.

Doesn't lag for me either. Am I the only one playing this game without a problem?

^^
it lags for people who have okay-ish connection.

but it plays okay for me too.

4 hours? Why didn't you just start your own game? No waiting for that. Problem immediately solved. And did you really wait for 4 hours to get into a game? Really? You have more patience than me, or indeed anyone I know.

How would one know what their hosting cap is?

the game calculates your connection and automatically detects how many players can u host. i can host 10ppl

"doesn't work" is an overstatement. 

i have trouble connecting to an online game, it seems to take 4-5ish attempts before i actually get into a game.  once i get into a game things work just fine and the game is great but i think i've spent about as much time trying to connect to a game as i have actually playing the game. i'll bear with it for a while here but if things aren't sorted out soon i'll proably loose interest in quite quickly.

So when you go to create a game the first number that shows up at the bottom would be how many you can host or does it calculate it as the game is creating?

Hope the patch arrives soon. Impossible to play like its now for me

This number of players is calculated by the time u press "play with others"