I read that backup files are kept in memory on the C8P, and that only the last 5 are kept.
When I look at "Local Backups", it is showing me 10 backups, not 5. Why is this?
These files take up memory which brings up the question of how much memory does the C8P have, and is there any way to know how much is being used?
The local backups are stored to the hub’s eMMC flash drive, not the system’s RAM. Thus, keeping them on the hub is not hurting anything.
IIRC, the C8 Pro hub has 2GB of RAM and 8GB of eMMC storage.
There are 10 local backups, and 5 cloud backups (if you subscribe to cloud services).
It has been that way for a long time, I think it was 10 even before they offered cloud services. I would be curious where you saw the number 5 for local backups?
It's in the on-line documentation.
Local Backups
Your Hubitat Elevation hub automatically generates a local backup on every successful reboot and overnight shortly after 3 AM (local time) daily by default, unless a recent backup is already present or this schedule is changed (see the Scheduled backups section to change). You can also generate a new local backup at any time.
The hub will store up to five local backups on its own; you can also download a local backup for storage elsewhere on your own.
Maybe outdated info then... I just counted, and I have 13 local backups listed on that page 
The Hub Protect service subscription gives 5 (latest) cloud backups, and the Cloud Backup subscription gives 10 (latest) cloud backups. I say "latest" because you can't do something like pin a certain one to keep indefinitely.
The upcoming enhancement to the subscription management portal/page that BobbyD is working on will allow for stacking Cloud Backup onto other subscriptions if interested.
This is now 10, plus up to 3 from platform versions older than the current -- a silent change made about a year ago. The docs were just updated (thanks!).
These are normally so small they really should not be a concern; as @ogiewon noted, they are stored on disk (well, eMMC) and not in RAM (aka "memory"), so they don't really have an effect on regular hub operation. You can certainly delete any you don't want, but there usually isn't much of a point -- you'd just be giving yourself fewer things to try reverting to if you realize something went wrong. 
Download the Hubitat app
