During Diwali the shops are ...... of people.

During Diwali the shops are crowded with people.
In this context, "crowded" indicates a large number of people present in the shops, suggesting that the shops are filled with customers or visitors. "Crowded" specifically conveys the idea of a space being densely packed with individuals. Therefore, "crowded" is the most appropriate choice to complete the sentence, accurately describing the situation during Diwali.