Just about 50k people live in the islands... The density is quite low, and much more people lived there in the past, now for locals it's more profitable to just rent their flat to tourists, while living in the mainland.

The Venice having 155.000 people isn't the islands. Those have roughly 55.000 people. The rest is spread on the mainland.

In Italy when you talk about a city it's usually about the city itself and some towns around it. In this case most of the population is in Mestre and Marghera.

So it's actually even smaller than you thought :)