Ok, thank. I figured it was just fly larva.

Its not excessive because their water bottle leaks which causes their bedding to get wet and I do not want them to have to live in that. I have changed the bottle twice and each one leaks so I've given up, its a lost cause.

As far as too small of cage I have a two story cage with two Guinea pigs living in it. I asked the pet store and they said this cage was plenty big enough. I can't give you the actual measurements because I do not remember them.