Deferred shading is the way to go with so many lights, but artistically speaking there are too many lights in there. There are different "kind" of lights you want in a scene:
1. lights you want to see (i.e. light bulbs). You can use some halo textures and light maps to bake these in, having little performance impact
2. lights that you want to see reflected, like if you have a car in a show room and you want lots of lights bouncing off its surface, you usually solve this using some environment texture mapping effect
3. light that actually affect stuff which can be also per-vertex or per-pixel, the later being the real performance hogs.
From an artistic point of view however the less lights you use, the less confusing is for the player and the more dramatic effects you can obtain. If you look at professional films and photos you can see there are only a few lights that are used in a clever way to produce astounding effects. The more lights you add, the more fatigue and confused the player will get.