I'm making some changes to my paracosm, and I decided to make magic a larger "thing" in it. How much magic do you think is *too* much? I'm thinking about magic influencing the land that people inhabit, and magic influencing people's lives. Now, everything would have a plausible explanation (magic in my paracosm has a set of rules), but I'm afraid to fall into the "deus ex machina" territory. When should we stop using the "It's magic!" explanation for improbable stuff?
There is no such thing as too much or too little magic.
When creating a world, incorporate as much or as little magic as you want. It’s yours, and you can do anything with it! And in fact, magic is a fantastic explanation if you want improbable things to be a part of life in your world.
The only thing you need to do when working with heavy-magic worlds is make sure to have internal consistency, and make sure to make it all make sense (if your world is one where things make sense. Sometimes it’s best to just handwave things, and preposterous stories can be a lot of fun! It’s mostly stylistic choice at that point). You mentioned that everything follows a set of rules, so it sounds like you’re well down this path already.
A few things to avoid so that your magic-heavy world will not annoy your readers:
Follow Your Rules. If something always happens a certain way, do not deviate from that rule unless you have a legitimate explanation for why it can do so. Stories that focus on a breaking of an established rule can be really neat, and breaking your own rules can be fun, but you have to explain why. If, in your world, someone can use fire or water magic but never both, and then a character shows up who does, you need to have an explanation behind that (this can vary; supernatural forces, rare and not-well-known circumstances, misunderstanding of the rule by the general public, etc, as long as the explanation is there).
Don’t Make it Convenient. If the magic in your world solves everyone’s problems and never causes more problems, it will be boring. If magic is powerful, think about what kind of social implications it might have, especially if not everyone has access to it equally. If you implement magic in a way that solves one problem, try to at least give it the potential to cause other ones.
Also, if you need something to happen for plot reasons (someone needs to die, a battle needs to be lost, an event must play out without intervention) and it is possible for that event to be stopped or changed with magic, make sure you have a reason that it didn’t get changed. It drives me up the wall when powerful characters don’t use their powers at crucial moments for no apparent reason, and everything gets screwed up as a result. If your character can see through walls, there’s no reason for her to peek around a door and get spotted by the bad guy. However, this is not to say that events like this cannot happen! Maybe the character who can see through walls is being pursued by someone who can sense her magic if she uses it, so it’s actually less risky to try to peek around the door. Alternate explanations can be fun, and they won’t irritate your readers like it will if someone conveniently forgets to use their magic.
Make it Part of Life. If you’re going to have the land and the lives of people influenced by magic, make this influence show up in a lot of little ways, and try to make it a dynamic aspect of the world, instead of leaving it static. What if there is a magically very fertile land, but in order for it to remain fertile, certain trees have to be left untouched? What if everyone knows that, but then lightning strikes one of them and it dies?
If a mountain is held up by magic, is it safe to dig a tunnel through it, or will that disrupt the magic?
If someone who would otherwise die is kept alive by magic, how does that change their life? Did the magic simply fix whatever was wrong with their body that would have killed them? Do they have to be sustained by an object, and if that object is damaged they die? Are they magically tied to the person who may have saved their life?
I think the most important way to stop magic from killing all your tension is to make sure the magic has a cost. Perhaps it’s unpredictable and the characters can’t really rely on it. A character who must cast spells using their own blood can only do so much before needing to rest; one who burns their own lifeforce and shortens their lifespan with every spell they cast will likely come to prefer not casting spells at all unless they have no other options. Spell components can be expensive, rare, obnoxious, etc. It could be that everyone learns a few basic spells and cantrips the same way they learn reading and math, but any significant power requires extensive study and training, an inborn talent, something like that.
Games are actually a great place to look at this. Video games, tabletop RPGs, even some board games–if there’s magic in play, they have to find ways to balance it and keep a character from being too broken and being able to run roughshod over any obstacle in the way. Cooldowns, mana costs, skill trees that cut off certain options depending on which path you take, physical components that get degraded or destroyed with use: all of these are ways to keep the magic users from being able to do whatever they want whenever they want. In fiction these things might not be quite as clearly quantified, but you can still use the concepts (like a sorcerer might not have a defined number of spell slots, but their spells become less effective or even stop working entirely if they push themselves too hard).
Personally, my line for “too much” magic in writing happens when: a) it takes such a long time to explain the function/purpose/execution of the magic that it distracts from the scene/plot/narrative (UNLESS some magical execution happens to be part of the scene/plot/narrative) b) it involves memorizing too many vocab words/rules/quirks of operation to stay on track with the world c) so much gets hand-waved away (author assumes the reader will excuse and accept things as ‘magic,’ and/or that explaining the rules somehow makes it less 'magical’) that you’re left wondering “huh? wait, why did that happen/how was that possible? Magic, I guess…” d) there’s a mostly-magical solution for almost every conceivable problem except the cliche basics, like “can’t force people to fall in love,” or “can’t bring back the dead” (which, imo, are pretty weak constraints by themselves. Like the genie from Aladdin, he’s so powerful except for those things. Materialize an army? Make you improbably rich? Done! BUT they include the bonus restraint of “you only have three wishes” as a much better balance to the magic system).
I guess I can summarize that as “don’t let magic itself steal the spotlight away from more important things, but don’t let it be a mystery either.”