Personally for me I would prefer to be isolated than over crowded, I also think there is no definite answer to this question because it varies from person to person. For example, introvert may prefer isolation but extroverts may prefer being crowded. Eight words left so I will just say this
Humans as a species are dependent on being around each other. We thrive in social situations and even live longer when we are socially active in our lives. An example of bad forms of isolation is solitary confinement. Solitary confinement screws up your sleep schedule and makes you start to hallucinate and go crazy. Quakers started that tradition but even they said that it was unethical.
A "better" living is something absolutely subjective. For instance, if the objective of a person is to live like a monk and enjoy long periods of meditative calmness, isolation is better.
In other hand, if you want to be in a cosmopolitan area (like New York and other global cities), you're most probably looking for a very crowded city.
Also, the background in which the person was raised can influence his preferences on how "crowded" his environment should be in order to be a "better" environment to live in.
So, it is not possible to affirm objectively that living isolated is better than overcrowded.