。
There are lots of boats and people in the bay.
Literal
Bay [locative-には] many [possessive-の] boats [and-と] people [subject-が] exist.
A simple existential statement about the bay. 湾 here is the general 'bay, gulf' (contrast with 湾岸 = 'gulf coast/shoreline'). The には particle stack topicalizes the locative (in-the-bay, as-for-that). たくさんの (adjectival 'many') modifies both boats and people, which are joined with と. ある ('to exist for inanimate') vs いる ('to exist for animate') — here ある covers both, since inanimate comes first.