Oh, yeah. That's a lot. And tags were ALWAYS available.
A couple of things for clarity.
To understand more about how WordPress works with tags and categories, as well as the differences between tags and categories, which relate to all types of blogs, see Tags and Tagging in WordPress. In a nutshell, categories are your blog's table of contents. Tags are your index words.
In WordPress, categories have always been tags, as they should, since they are bodies of work, collections of like content on your blog. A tag could be added with a WordPress Plugin or just by inserting rel="tag" into your post content. Bingo, tag.
I'm on WordPress.com and I created the A Tagging Bookmarklet for WordPress and WordPress.com Users for WordPress.com users so they could add site search tags (or whatever style tags) to their blogs without Plugins.
As I said, too many categories is like standing in the grocery aisle trying to choose among hundreds of options. With three to seven options, I can quickly make a choice. With 50, I ignore it because I don't even know where to start. When I teach and speak about the basics of beginning a blog (or remodeling), I always recommend no more than 5-7, 10 is pushing it. Tags, you can have millions. Who cares. They are really per-post content based.
So using Woopra to help track down your most popular will help you help your readers by giving them fewer choices, but also by giving them an instant visual message on what your blog is about. As a table of contents, your blog categories are gateways to your content, inviting them in for deeper inspection.
As for your Theme archives, if it displays them by category, excellent. You are ahead of the game for most people. If it includes chronological order, remove that as no one but you cares. It's just clutter.
Also, a visible page with a listing of your posts is called a "site map" (two words). A sitemap (one word) is the word for the hidden XML file, if you have one, that many search engines now use to trace through all the content on your blog or site. Again, I wish I was in charge of naming things as this was a seriously poor choice and has caused endless confusion where people download a sitemap Plugin thinking they are going to get a visible display and they see nothing on their blog.
Good for you and I hope this helps. And I'm so glad you brought this up. It's a great point and one people are often confused about.