You'll sit at whatever size table is appropriate for the party you book. If you book a ressie for 2, you'll be at a table for 2. If you book a ressie for 12, you'll be in another room! (hee hee)
Palo is supposed to be a "romantic get away" type of thing, so there's no way you'll be with another family. The only exception to this that I'm aware of is that if you book a ressie for a single person, they will ask if you'd like to dine alone or if you'd prefre to be places with "another lady if available." Since I travel as a solo mom a lot, I was very pleased with being asked. Again, you'll get what you request.