The scaling doesn't work.
For another similar example, think of how much percentsge space you need in a 2 story building devoted to elevators (almost none) vs a 200 story building (a significant percentage of the middle core of the building is nothing but elevators). Take that and scale it even worse, and you have roughly the small town vs big city traffic issue.
The truth is that you can, in fact, build enough roads to reduce congestion. It may be too expensive. The road land use fraction may be too high. There may be political problems. All of these factors have to be taken into account before deciding to build more roads.
Nevertheless, it is physically possible to build enough roads, and anyone who doesn't acknowledge this basic reality isn't having a serious conversation.
Sure it's probably possible, but by the time we've built that many roads we'd need to cycle from the carpark to the building anyway.
If roads took up zero physical space, I'd agree with you, but the perverse thing is that as population density goes up, you not only have more people on the roads (requiring more road), but you also have more need for living space, stores, and office buildings (all which take up space, giving less room for roads).
As it is, comparing it to a small town is meaningless.