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ost_uid0]This actually points to a far deeper problem - how big is the Federation?
If we go by Picard's FC statement and assume he meant a circle-like profile with 8,000 lightyears diameter, that would be a hell of a lot of space to patrol for only 700 ships. Also, the later stages of the Dominion War make it pretty clear that there's a lot of ships...It's almost directly stated that the fleet to retake DS9 is about 600 ships. If we only had 700 ships total, this would mean ordering most of the ships defending the Federation borders into a single attack action and leaving the rest of Fed space nearly completely undefended.
Since I like to think that the Federation takes up a major chunk of the Alpha Quadrant, I personally think Starfleet has something in the order of magnitude of about 5000 active ships. That would, of course, include tankers, freighters, etc. - but also quite a lot of heavy cruisers.
Now, admittedly, this is the "war readiness" state, but it can't be that much more than normal operative strength; if we assume that the fleet was hastily build up by a significant factor, this begs the question of why the fleetyards had so much spare capacity.
As for the "only ship near Earth" thing in the movies, I assume that this is the legacy of the great exploratory phase that was going on all through TOS and early TNG, where the Federation expanded rapidly. Later on, the Feds saw that they had hit borders everywhere, and decided to A) conduct extensive surveys in systems they had only scanned briefly after claiming the space around them and B) to consolidate their defense and normalize sector fleet strenghts. Thus, a lot of the exploratory ships (which we have been consistently shown - of course *they* are alone, operating in unchartered space) were recalled to establish a defensive parameter. In the same vein, ship production of medium-range, combat-capable designs was cranked up, bringing fleet strength up to high levels.
As for Wolf 359, as said, the Federation is pretty big, and warp drive isn't unlimited speed. Those 39 ships were simply everything that could reach the Borg cube in time for an intereption. I figure that this not only prompted the marked increase of fleet strength and the stationing of "defensive" fleets near important core worlds, but also lead to the continuing warp drive research that has steadily increased speed in newer designs - after all, nearly all post-Galaxy designs hit something well over Warp 9.9 as maximum speed, whereas our good old Enterprise-D could climb up to 9.6 on a good day.
And that's how *I* see it, atleast.
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