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That there are 40 rounds in the real life draft is kind of irrelevant. In OOTP, if you run a 40-round draft, you'll get 40 new players, assuming you sign your top round guys. Real life teams only sign about 20-25 of their draft picks each year. So if you want a realistic number of players joining your organization each year, a 40 round draft is way too long.
And if you have any compensation picks at all in your draft (either for FA or for not signing draft picks) you'll need to generate a pool larger than the number of draft rounds, or you'll run out of players before the draft is over. With a 40-round draft you might not care (the game won't crash, it's just that the draft will end in the middle of round 38 or something) but if you run a shorter draft, it might matter a bit more. If you have a 20-round draft, generating players for 22+ rounds is usually fine.
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