Picture the ocean. Can we agree that it's immense? How many ships can we launch until it becomes too crowded?

Now imagine the Earth has no land masses and oceans cover all of it. How many more ships can we add?

Now imagine that the Earth is bigger than what it is. A few hundred KM larger in radius. Your oceans have become so much bigger now as they have a larger area. And now imagine your ships are not only on the surface, but they could be submarines, or they could be planes, all crossing one another without ever touching.

This is what space looks like. It's ridiculously big. The only issue is that some orbits are way more useful than others, so they get more use. We can fit a crapton of stuff there, provided that we stop doing dumb things (like blowing up satellites).

LEO also has plenty of drag, so they decay. Higher orbits are more problematic.