Could you attach a screenshot of your chart to investigate the problem?
Yes, your guess is right on target, you have too much data that you want to present. For this case probably is good decision to use scrolling:
this.ultraChart1.Axis.Y.ScrollScale.Visible = true;
this.ultraChart1.Axis.Y.ScrollScale.Scale = 0.2;
string-based Axes like the Y axis in a bar chart ignore TickmarkStyle = Percentage since that is the default value for the property, and the default behavior is supposed to display a label for every bar.
if you need to implement an "every nth label" solution, you can set TickmarkStyle = DataInterval and set the TickmarkInterval to whatever value is appropriate.
you could also use the ChartDrawItem event to hide certain axis labels.