Here is a simple corrected version:
Many people live in the city. Each street has lots of big houses and lots of cars.
Why this is better (short and easy):
- We use a small letter for "city" because it is not the name of a place here.
- "So many" is okay, but "Many" is simpler for a child sentence.
- "Each street" is one street, so we say it has or is something. The original "bustles with cars" was not correct here. We can say "has lots of cars" or "is bustling with cars."
Another correct option that keeps the word "bustling":
So many people live in the city. Each street has lots of big houses and is bustling with cars.