Who should take group lessons of more than 5?
A group lesson is not the place for fundamental strokes, but more for strategy and point play. Players who are more accomplished typically are very competitive and use the large lessons as a conditioning tool and rely heavily on point play (serve and volley, etc.). They do drills that would be more exhausting for a smaller class.
Who should take group lesson of less than 5?
Players in this group can still enjoy working on and learning fundamentals, such as control, consistency, etc. This size group is a great place to learn strategy.
Who should take private lessons?
Every level of player.
Beginners/Novice players wanting to learn correct skill, form, footwork, grips and other fundamentals. With a little help, you will improve your skill to become an intermediate player.
Intermediate players have their basics, but lack control, consistency, shot selection, power, etc.
Advance Players might have all the basics but lack just one or two shots to make them more of a complete player. For example, they might need more topspin on their ground strokes or more power in their serve.
In general, a private lesson is a good tool for any level player. However, beware of the group lesson. Many group lessons become aerobic ("ant-bed of activity") workout. Basic tennis skills and knowledge are left out in order to make sure so many people feel like they are getting a workout. The more accomplished you are as a player, the larger number of people in your lessons the better. This allows for a great variety in point play drills. Shy away from large groups if you are a beginner or intermediate. Learn your basics first in private lessons, then gradually go to small group (4-5) lessons. In my experience, I have found that a student will learn as much in a 30-minute private lesson as she/he will in a 3 hour group situation. The best present you can give yourself is a private lesson. Can you picture Pete Sampras or Martina Hingis in a large group lesson before the U.S. Open? (Me, either!) Many students shop around and price lessons. Because they see the difference of the lower price of the group to the higher cost of a private, they opt for the groups. You know the old expression "you get what you pay for." This is where quality counts more than quantity. There is very positive ratio of the number of private lessons to how quickly one improves.
Good luck on the courts!