The fog was so thick it was hard to make out the people walking.
Literal
Fog [subject-が] was-thick [because-ので], walking people [possessive-の] shape [object-を] make-out [nominalizer-の] [topic-は] was-difficult.
Relative clause 歩いている人たち = 'people who are walking' modifies 人たち. 姿 ('figure, form, shape') is the specific word for someone's visible form. 困難 ('difficult') is a な-adjective, more formal than 難しい.