Tags are kept in flat files to identify when the context of the data is changing so if you want cities , states and something totally unrelated( lets say carname ,qty) then your file might look like
CityInfo -<this is the tag>
Denver Colarado
..blah blah
CarInfo-<this is tag>
Pontiac 10000
blah..blah..
Don't think you will need a tag for every record, nor do i think that if you set maxoccurs to unbounded than it will behave like that. Another solution i was thinking to test if this is really the problem is to set the maxoccurs to some very large value(how about 10000), this could also solve your problem eventually.