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Nobilis is a very, very animistic game. Just about everything has a spirit, including things like collections, in all their combinatorially explosive glory. Even for the Nobilis, the mythic world is limited more by what you choose to pay attention to than by what spirits exist. For example, a typical human does have a human spirit -- plus a liver spirit and a heart spirit and an "organs" spirit and a "body" spirit.

All of these are pretty intent on being the way they are. This makes reality fairly consistent. But it's not quite as consistent as people think, because the underlying world is about myths and not immutable laws. Spirits have limited free will, and can exercise it in unexpected ways.

So a crowd is not a group of people. It's a crowd spirit with links to a group of people. The physical proximity of those people comes in part from the nature of crowd spirits and in part from the perceived world saying: "Hm. These people are a crowd. They must therefore be local."

Creating a crowd can happen several ways. First, you can make "that guy over there on the bench" a crowd. And he will be. People will get faint because they're surrounded by all these people. (That guy over there on the bench.) It'll be hard to see stuff because of the milling guy on the bench.

The "faceless non-people" is a possibility.

If you've defined Crowds in a straightforward, literal, scientific way, then you have three options. One is to yank a random group of people into place. They'll pop out of wherever into place and behave like a crowd that belongs there. This can in fact drive them insane, which is not recommended. Two is to create a crowd of people out of thin air. Three is to make an incipient crowd, which means that a sufficiency of people will find every possible excuse to get there as soon as possible, and will get there in the most accelerated, efficient route possible. Solutions one and three can eventually empty the rest of the world. This will probably drive mere millions insane; the rest will flail around and buy the explanation the world comes up with even though they have direct memories of its untruth.

Similarly, when you destroy traffic, you in fact destroy the traffic spirit that's gumming up the travel of the car spirits. Typically, you can do this without driving people insane. Local conditions adjust so that everyone can in fact travel faster, and instead of "suddenly I'm going at 60mph instead of 10, and where'd that red car go?!" It's "yay, I can accelerate!"

Think about it this way: optimizing conditions to remove the traffic is an insanely hard problem. But the player doesn't have to solve it mathematically. All that the player needs is for the solution to exist. In essence, they have an oracle for the problem.

As for human free will, the setting tends to define it as: "Once in a while, they will exceed every expectation. As a rule, they won't."