How many players can explore co-op together?

Four is the ceiling, not the requirement. Co-op is online, so the squad you roam with is whoever you pull in rather than anyone local, and the same group carries across activity types without breaking up. You explore, you hit a puzzle, you hit a boss, and the party stays as it is.

The boss content is where a full squad earns its place. World Bosses run as four-player co-op fights, and Alpha Aniimo bosses can be taken on cooperatively too. Both sit out in the open world rather than behind a separate queue, so a group formed for exploration is already the group that fights them.

When you need a second player at minimum

Some Sanctum puzzle dungeons will not open for a solo run. They enforce a minimum party size of two, so at least one other player has to be with you before the content is available at all. That is the one place where co-op stops being optional and becomes a gate.

The rest of what a squad does

Co-op is not only combat and puzzles. You can trade Aniimo with the players you team up with, and shared activities extend to alpha encounters out in the world.

Farms are worth a mention because helping pays. Tilling soil or assisting on another player's farm returns you a portion of that farm's harvest, which makes visiting a friend's plot a real activity rather than a favour.

Not settled: The four-player figure is tied to exploration, puzzles and boss fights. Whether farm visits and trading sit under that same cap is not settled.