Residential density was higher in Manhattan a hundred years ago, but it's probably (I don't know!) still more crowded generally due to much greater commuter and tourist populations.
Still people generally have the wrong idea that density requires tall buildings. Parking and setbacks are the anti-density forces. You can fit a lot of people in a neighborhood of 3 story rowhouses if there isn't a massive amount of off street parking and setbacks. No setbacks doesn't mean no lawns or outdoor spaces, just no pointless mostly non-usable space setbacks.
