On paper, sure, but we've seen many times where individuals are in completely separate areas of the holo world. The whole world War II bit in VOY, and when boymler went off trying to find the meaning g of life in his own program. Doubtless there's more examples but that's all I have in the memory buffer right now.

I mean, you can have multiple people in the holodeck who are all out of sight of one another, so it's definitely capable of partitioning them off to display different environments to each.

It's unclear what the limits of this are, as most of the mass usage we see (e.g. when it's used for a wedding reception) has most of the participants clustered tightly enough that it wouldn't be necessary. But one of Quark's holosuites can accommodate an entire baseball team despite being much smaller than a Federation holodeck, so the actual required space per partition has got to be pretty small.

Frequently however characters will go on to the holo deck and walk further apart from each other than is possible in the limited space. So it must be able to do some kind of partitioning.

Like in voyager when they simulated the entire town, it was a town it was much bigger than the holodeck which seems to be only about the size of a tennis court.