What happens when you fill your room block?

Our hotel adds rooms to the block in groups of 10 based on availability. So we started out with 10 rooms blocked, once those were filled they added another 10 to the block. It is a courtesy block, so any unbooked rooms are just released a month before the wedding at no cost to me.

Our room block at the venue automatically adds rooms when mine is full. I already expanded the room block for Friday we only had 10 rooms and I knew we would far exceed that for the night before lots of out of state guests.

Mine also added rooms if the block was full for the same price. But I definitely wouldn’t do anything that would leave me financially responsible for unused rooms.
Keep in mind that for 130 guests, you will need a max of 65 rooms. When you add in families or couples that may share a room, as well as declines for the wedding, that number will go down. Also, some people may not want to or be able to stay for two nights, which will force them to book elsewhere. You can guess on all this, how close you are to the right number depends on how well you know your guests, but it’s still just a guess. If they will add on rooms if your block fills, I would start with the smallest block and go up from there.

It depends on the hotel. We went with Marriott. We started with a 15 room complimentary block. As the block filled (3 or so rooms left at a time), we added 5 more rooms at the same rate as long as they were available in the hotel. We told our guests early (with our save the dates 10 months out) so a lot of people booked farther in advance. We also had a second block and a few people stayed at other hotels that they had points at or had cheaper rates. Two weeks out, our hotel released all unbooked rooms into regular booking so guests just had to book in normal rooms at that point.

Hotel block needs are highly varied and difficult to plan. I feel your pain!
It's also interesting the difference between the signed hotel contract for blocked rooms and the verbal confirmations that I got regarding questions I had. Based on verbal responses, our hotel will add rooms as needed, and will also adjust room types based on demand (king or 2 double beds). There is no charge for us for the lower room price. None of that is outlined in the fine print, but hopefully it's ok.
Some of my friends are doubling up on rooms because their spouses are not able to attend the wedding. Some of the families are opting for airbnbs so that they have kitchens and space for kids. In the end, I'm glad we don't have a financial obligation for the hotel block! Good luck.

UPDATE: Thank you all for the great feedback! It's so interesting and helpful to hear what other couples have experienced and what options are out there. Since our hotel does NOT offer courtesy blocks (commitment only), it was such a struggle to come up with a middle-of-the-road room block number that we felt comfortable with. Luckily, our hotel confirmed (at least through email) that if we exceed our room block, we have two options: 1) we can add more rooms to our block, assuming there is availability and if we feel confident that those rooms will be filled so we don't end up responsible for them, and 2) the discount rate for our guests will be honored as long as there is still availability, even if the block has been filled. Such a relief to know that we have options and hopefully this can help others out there that are wondering the same thing!