You can reduce the file size or resolution of images and create album again. You can process all the files in one go with Processs MUltiple Files option in Editor. http://help.adobe.com/en_US/photoshopelements/using/WS287f927bd30d4b1f89cffc612e28adab65-7 fff.html#WS287f927bd30d4b1f89cffc612e28adab65-7ff6
Also check the folder in whcih your album gets create and check how the images are embedded. If it`s an HTMl file then your images must be in some folder. You can process some amd check if it automatically reduces your album size.
Thanks for your reply. Unfortunately, there seems to be a step missing. When I open "Photo Editor" the "Process Multiple Files" option is not available to open since it is greyed out as shown below. Could this be a change in Elements 11?