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The caster chooses who to target with the spell. The spell should really say "up to", but since the magic rules state you have to specifically choose targets, it's not strictly necessary for it to say so (after all, you could easily be in a situation where it's impossible to choose that many targets).
Howie23
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In situations where the up to doesnt make sense, you can always cast the spell at a lower level, down to the minimum needed to cast the spell. Doing so changes other numerical variables as well.
So a 10th level wizard could cast a third level spell at CL5. If the spell itself did 1d6/2 levels of fire damage, it would only do 2d6. If he wanted 3d6, he'd have to cast at CL6, and thus affect 6 targets.
Note, I'm not saying this is the only way to reduce targeting, but could be used if either it made sense for the spell, or if the GM insisted the targeting required CL number of targets.