Routing – RIP Update Packets

As commented you are best using another IGP because of the limitation of RIPs infinite metric.

However you can configure individual ports to add more than one or alternatively configure offset lists to increase the advertised routes based on network address.

RIP normally increases the cost by adding one to the route’s metric before storing the route so to alter this you can change the amount that an individual port adds to the metric of a Learned route, for example to increase port cost then use:

interface FastEthernet0/1
ip metric 5

Alternatively lookup using an offset list to use an access list to point to a specific network you wish to influence (and in which direction). An example resource is here: offset list blog

Most of the references say "RIP is not scalable" hence can be used only in smaller networks. But none say "WHY?" What is that in RIP that actually preventing it from scaling to larger networks? And HOW OSPF overcomes the disadvantage of RIP?

Summary

• RIPv1 floods routes frequently (every 30 seconds), which introduces large CPU loads as the size of the routing table increases. This is compounded by the reality that RIP recalculates metrics for every route, every time it floods the route out a new interface (regardless of whether there was a topology change or not). As the number of routes increases, this is prevents RIP from scaling as well as other protocols.
• RIPv1 is classful
• OSPF floods routes infrequently. If there is a topology change in the network, only the LSAs changed are flooded; metrics are calculated on these changes. As such, on-demand route calculations, on LSAs which are flooded infrequently, make OSPF scale well.
• OSPF is a classless protocol, which supports CIDR, which also makes it a more scalable protocol than RIPv1

RIPv1 Details:

RIP is a Distance Vector protocol; all Distance Vector protocols run the Bellman-Ford algorithm. At a high level, this means:

• All routes in the routing table are periodically announced through all interfaces.
• RIP floods routes out every RIP interface every 30 seconds. Since RIP routes by rumor, this means every router in the topology must work in direct proportion to the size of the routing table every 30 seconds. The CPU load and traffic jitter implications of this become scary as you approach thousands of routes (particularly on CPU-based routers with no hardware forwarding).
• The RIP protocol itself has a fixed maximum hop-count at 15 hops (which is small if you need to do any form of path-weighting).
• Protocols based on Bellman-Ford algorithms are prone to routing loops, and count-to-infinity issues.

OSPF Details:

By way of contrast, OSPF is a link-state protocol running Dijkstra's algorithm. As such:

• Each router only announces its directly connected and redistributed routes in routing updates (called LSAs).
• Each router floods their own LSA every 30 minutes by default (because the route refresh timer is 3600 seconds, or 1 hour)
• LSAs are also flooded when triggered by changes in the routing table
• Routers use Dijkstra's algorithm to perform distributed LSA path calculations only when necessary.