I'm immediately suspicious of any chain that links "denser environments" to "less congestion", since everywhere I've ever been, the densest environments have the most congestion.
It's a bit like adding extra lanes, to some degree, demand expands to meet capacity (But I mantain that in this case the net effect is possitive)
There would be less space to be congested by fewer vehicles, but in this context, less congestion also means fewer people experience the congestion directly (because it also works to disincentivize car usage), but those affected have it the same or worse.
I wouldn't take my car to a large city center if I can at all avoid it, which seems to be the common reaction. These people are "transparent" to the congestion—they don't add to it and (mostly) aren't affected by it.
If it’s parked on the street, that is taking up a lane that could be carrying traffic. (And in some cities it’s common for parallel street parking to turn into a lane from 4-8 PM or similar)
Less parking spaces > denser enviroments > more walking(Or other more compact forms of transport) > less cars (To an extent) > less congestion
The US has multiple (smaller) countries worth of parking space