Here's how to archive multiple customers at once. Click on...
View Customers --> Archived Customers
That's a list of all your archived customers. At the top is a link to archive multiple customers. (click it!)
You'll see some good info here, including when a person's last attendance was and whether they have an active pass. So you can make some thoughtful decisions about which of your customers to consider for archiving.
To archive all you need to do is select the customers to archive and click the Archive button. You can sort the list by clicking on the headings (for example click on the last attendance date to see who has never attended a class.)
There is currently no way to mass 'un-archive' customers, you'll need to do that one at a time. So proceed carefully!