^ I am pretty constantly amazed at how non-direct the line seems. I look forward to checking the LRT out in person sometime to see for myself.
The original ION section is relatively direct in following the "north-south" (not actually north or south) alignment of Kitchener and Waterloo, but the Cambridge section is really noodly. Historically speaking the Grand River Railway (the old interurban) went directly from Galt to Kitchener via Preston and had a branch line coming off it to serve Hespeler. Hespeler is a bit isolated from the rest of the Region and even from the rest of the city of Cambridge, and is honestly more in the orbit of places like Guelph or along the 401 in general. Having the highway placed between it and everything else also really cuts it off. So there's certainly political considerations with making ION Stage 2 take a giant detour through Hespeler and Cambridge Centre on its way to Galt. At the same time, there is a lot of money and effort being poured into building up Galt as "Downtown Cambridge" and marketing Galt specifically *as* Cambridge for purposes of tourism, advertising, etc (most of the rest of Cambridge has nothing about it to market, and is just faceless suburbs). The success of the Handmaid's Tale put it on the map a bit. This is all a complete 180 for the City of Cambridge (which still has a number of small-town style city councillors who aren't great at making planning decisions), after decades of undermining the historic centres in the city like Preston and Galt in favour of suburbanization, and (along with the GRCA) demolishing a number of heritage structures along the riverside in Galt to build giant berms as a misguided flood control measure after the historic flooding in 1974.
With the 206 Coronation iXpress now operating, it seems very likely that, for example, if you wanted to take transit from Galt to Preston, the 206 would be a much faster ride, or at least much more direct -- this will probably become even more accentuated over time if the Region follows through with BRTification of the iXpress network. That said I imagine part of the idea with the line is that people from Hespeler and Preston might go to Kitchener or to Galt, but people in Galt aren't necessarily very likely to go to Kitchener, as Galt has more downtown amenities of its own.
That picture isn't very close to crush load. Crush load is extremely uncomfortable, with practically no space between passengers. No seat would be left empty. Plenty of riders at each stop would be opting not to get on a crush-loaded car.
I haven't experienced crush loading on the Ion, but I hope I never do, and it does get busy at some periods. I take it from Conestoga to Grand River Hospital in the afternoon peaks, and it can be fairly busy. As mentioned, GRH is busy anywhere from 2:45 to 4:30 with high school students. The University segment can get busy at various times a day.
The system is supposed to have better frequency than this already, but that has been delayed by vehicle reliability issues. Hopefully soon. Often, it does seem called for.
The only time I experienced genuine crush loading was on launch day, which was at least in part because many people didn't know how to/where to stand, as most people in KW (unless they take heavily crowded routes like the 110) are used to getting a seat the majority of the time. Rider aptitude seems to have improved dramatically over the few months service has been happening.
I think once 8-minute peak period frequencies come in, the dynamics will change a bit -- Google Maps still often recommends parallel local bus routes for me like the 6, 8, or 12 because door-to-door time can sometimes be less when you factor in waiting 5-10 minutes, or 15 if you are unlucky and also off-peak. 8-minute frequencies will also enable better transfers -- I don't care at all about a single-seat ride, but Google Maps thinks I do. I suspect the higher frequencies will induce more app-driven demand, and ultimately boost ridership even if the average pphpd is lower after the switch.