Please take a look at the guide on the waitlist functionality here.

Throughout the booking process when the customer is booking online, they will be informed they are on the waitlist at each stage:

When selecting the slot...

When the item is in their basket...

In their confirmation email...

However, at no point does the customer see the number they are on the waitlist.

Yes! You can set a "Maximum waitlist" for your sessions that have a waitlist. To action this, head to Settings > Session types > select on the session type > Availability > if "Enable waitlist" is toggled on you'll then have an option for "Maximum waitlist size"...

Here you can set the maximum number of customers who can join the waitlist. Leave blank for no limit. Remember to "Save" to save any changes.

If you do set a maximum waitlist size, this will mean you can cap the waitlist. For example, if you enter 10, this will mean there will only be allowed to be a max of 10 guests on the waitlist at one time.