Your computer desktop is a lot like your office or classroom desktop. The more you have stored or open on your physical desktop the less space you have to actually work. The same is true of the computer desktop.
The computer Desktop is based on the amount of RAM you have in your computer. RAM determines how much physical space you have to use. Everything on your computer Desktop is loaded into RAM every time you start your computer. If you have a lot of stuff saved to the Desktop or open on your Desktop the less actual RAM you have left to run programs and to perform your work.
Too many open documents on or saved on the Desktop means the computer then has to save files on your Desktop that you aren't currently using to a Temp folder on the computer to make way for the thing you are actually working with. Then when you switch to the next item it closes the first one and puts that one in the Temp folder and opens the one in the Temp folder you want to use. The CPU works harder and more often as a result.
Shortcuts are magical. Put your documents in your My Documents and create a shortcut to them if you must have them on the Desktop and you save all that RAM but still have them available at the click of a mouse button. The difference in size between a shortcut and an actual document is astounding. A shortcut is a couple of KB in size whereas a document in Word can be 10 or 20 MB, or larger in size. A single 10 MB file saved to the desktop uses as much RAM as 5,000 Shortcuts. There's the magic.