I attended last year.
I paid for a seat in some stands that were set-up in place of (I think) the San Stae vaporetto stop (they actually removed the stop and brought in a barge with seat-back bleacher type seats on it). That's because I wanted to photograph the festivities and could not get any information of a good place to go that would allow my visual access. I don't come to Venice enough to know the best sight lines and locations. Also, because I was alone, setting up somewhere early and standing there for hours to save the spot did not appeal to me. The cost was 60 euro.
(edit to add: The reserved seat was nice for arriving-when-I-wanted-to purposes, but I was restricted to that one space up a section of bleacher seats so my photography opportunities offered little variation.)
I did not notice any more of a crowd than normal, although after the races were done, it did seem that everybody in Venice at that time was out. It's one of the highlights of the Venice calendar, so I wasn't troubled by it.
Even if you don't go, be aware that this occurs along a considerable portion of the Grand Canal, so MUCH of the vaporetto service is interrupted between Ferrovia and San Marco.