Is this true? Do you think only large multisigs care and it will benefit only large multisigs? What is a large multisig? (Main question)
No. I assume large multisig is a term used for multisig with more keys used in quorum or multisig with more users. Taproot is more than just changes to multisigs.
Everyone who cares about secure key management, LN, atomic swaps, privacy, batch validation, etc. should care about Taproot IMO
Even if you ignore all the cool things that are possible after Taproot, it will improve IBD for full nodes which was the biggest reason to avoid increasing blocksize every few months as it will lead to centralization.
Every node on the network must validate every digital signature of every input of every transaction. With currently implemented Schnorr batch verification, verifying all signatures in a block in a batch will become over twice as fast as individually verifying each signature.
Potentially even more exciting, during initial block download (IBD), new nodes must verify every single signature on the entire blockchain. The speedup of using batch verification grows logarithmically with the number of signatures being verified so that one could use batch verification to verify one billion signatures with at least a four-fold speedup! (Though I will note that this may be somewhat infeasible today as it would require a crazy amount of RAM). There are somewhere on the order of a billion signatures on the blockchain right now but sadly this speedup won’t apply to them, since they are all ECDSA signatures. However, future blocks containing Schnorr signatures could benefit from the speedup of batch verification for IBD in decades to come.
https://suredbits.com/schnorr-applications-batch-verification/
I think it's important to note first that BIP341-BIP342 are improvements to the Bitcoin script "framework" more than they are improvements to the smart contracting "functionality".
https://bitcoin.stackexchange.com/a/100051/
If Taproot also involves a new signature algorithm: Schnorr, why would only large multisigs care?
What does signing a transaction mean?
Currently, Bitcoin uses the Elliptic Curve Digital Signature Algorithm (ECDSA). With the Taproot upgrade, Bitcoin will integrate Schnorr, a second type of signature.
What are the advantages of Schnorr vs ECDSA?
When Schnorr signatures are part of Bitcoin will it be possible validate each block with only one signature validation?
Schnorr signatures will not replace ECDSA. Only outputs that are locked in v1 SegWit version are expected to produce a valid Schnorr signatures. ECDSA will continue to be used for spending current non-SegWit and v0 SegWit outputs.
https://bitcoin.stackexchange.com/a/90856/
According to P2SH.info 7% of all the BTC value locked belong to native SegWit scripts, we might see increase in this percentage considering the incentives involved in using Schnorr.
Is usage of multisig in bitcoin projects an issue? Which projects already use multisig? Is everything possible without multisig?
No. Multisigs are used and required for lot of things. There are lot of Bitcoin projects that already use multisig. And there are lot of ideas, projects, updates etc. which will be possible after Taproot.
Example: Atomic swaps will make it easier to trade on Bisq without security deposit
Few Taproot related projects: https://en.bitcoin.it/wiki/Taproot_Uses (Do not consider this list as final, anyone can edit the wiki to update list)
One interesting blog post by Andrew Poelstra about use of covenants with Taproot and few opcodes: https://www.wpsoftware.net/andrew/blog/cat-and-schnorr-tricks-i.html
New opcodes could potentially be introduced in a future soft fork: https://bitcoin.stackexchange.com/a/100047/
