.. No, it's just that the side entrance is pretty small and it gets crowded there at peak hours.

Where does it refer?
I think it could refer to the side entrance or nothing.
My try:

It refers to the side entrance.
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Thanks, Doll.
I thought 'it' means 'the situation'.

If this sentence doesn't have 'there' like 'it gets crowded at peak hours,' I certainly would have assumed 'it' refers to the side entrance.

From your explanation, is 'there' optional?
I would still make the same comment but that doesn't mean that another person will not say something else.

edit: I tought about other possibilities what "it" might be but I couldn't find. If it is something else, I will learn with you here.
I think both intepretations are correct. The speaker mightmean one thing but it's interpreted as another.
It could also be a dummy "it", actually, that's my interpretation. Whichever you choose, the meaning is clear and intact, in my opinion.
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