I took a look at your league and it is enormous
You have somewhere around 12 Major League type leagues with a number of minors associated to each league. That would explain why there are so many players created for the draft. I looked at a number of players that were around age 26 that showed up in the players list and they are in fact draft eligible players for the next draft. I don't believe there is any bug there and after your drafts are run then the undrafted players will become free agents. This is probably the largest league I have seen yet with 2006
This must make your head spin trying to keep everything straight
Let me know if you have any other questions.