This is a standard procedure with most hotels in the United States, not just starwood. The nightly rate accomodates 2 people. When there are more than 2, the hotels charge you an additional rate for the extra water/energy that might be used.

There are some exceptions where hotels will allow 4 people to stay in a room (i.e. Westin family package, some award stays)

You can book a room stating that there will only be 1 guest in your room and actually have 10 stay there. They won't know. The only problem I see is if you have to ask for a rollaway bed when you already have 2 beds in the room.