It depends a lot on the guild and what kind of attendance requirements you have if you should have a sign up or sign out system. Some expect you to be there all the time, then it's natural to have a sign out system. With a lower requirement a sign up system can make sense.
I'm not sure what the problem here is though, you ask for advice about how to deal with too many showing up, but also say that it's difficult to get people to show up.
I come from a raiding background where you could never expect a 100% attendance and then it's good to know what to expect from the raid when being the one leading it so it's easier to plan and maybe get replacements from somewhere else if needed.
If people aren't even showing up, introducing a sign up system might not help with that particular problem, but it could help you as a raidleader to know what to expect. Dealing with the problem will probably require other actions from you though. Maybe it's the days that don't suit people, or that it's too many raiddays compared to what they are willing to raid. Maybe you just need to recruit more. It's difficult to say anything about that without more information.
If the problem is that too many show up and you need a way to determine who to take to the raid, giving priority to those who sign up is one way, but if you do it that way, the result might in a few weeks be that you have more than enough signed and then you need to figure out a new way to decide who gets to raid. At least then you have a chance to plan. Sounds like you want to use some sort of rotation system to make it somewhat fair.
Something to consider is what "people for the best raid group" is. Is it just about class/roll balance or is it taking better players over others?
Oh, 7 healers have signed up. No way they'll use more than that, I won't even bother
Sounds like they don't really want to raid, so why not let them not even bother? That people react like this is not something I have noticed either. We answer if we can come or not and then wait for the raidleader to decide who gets to come. We often have too many healers signed. And some days we have too few, hence the overrecruitment.
Personally I prefer systems where you, when too many are signed/will show up, let those who will get turned down know in advance, so they can make other plans and don't waste their time on waiting for a raidinvite in vain. It's possible in both systems whether you sign in or sign out, but I get them impression it's not that common in the sign out systems.