Can I hold more than 10 healing items?
After completing the game and getting all four endings, it looks like the maximum is 10 for each type of healing item. That is, rather than carrying 99 of a few healing items, you can to carry up to 10 of several types. In addition to the medicinal herbs and salves you can find or buy, you can also grow moon flowers in your garden and catch fish, both of which can be used to heal.
Therefore, you should carry as many types of healing items as possible is the best way to ensure you (shouldn't) run out during boss fights.