The parade viewing area for the Christmas Party was the Tony's side half of the center island in Town Square. The Christmas tree was up, and that area is where most people packed in, as it gave you a straight down Main Street view of the parade. We walked over to the reserved area right about the time that the parade was starting, knowing it would take awhile to get from the back of the park to the front. So we stood facing Tony's, next to one of the dips in the sidewalk for strollers and wheelchairs. We were never crowded, and people were pretty much just lining the reserved area in a single line, standing next to each other. I saw cast members "evict" a few guests that were not part of the add on party when they attempted to duck into the area as the parade was approaching. There was space between us the and the next family, and that pattern followed around the curve. That wasn't the case up by the Christmas tree. So your experience with the crowd in the reserved area will depend on how sold out the add on party actually is, and how important it is for your group to be in a specific viewing spot of that area. For your reference, we went on a Thursday night, the week before Thanksgiving. Our little group got LOTS of attention and interaction from the elves that were tossing around and dancing with their giant inflatables. Our neighbors had just as much attention. I'm not sure if it was by accident or design, but it seemed like the elves spent way more time with the guests in the reserved island than the ones lining the regular sidewalks by Tony's and the train station.
It might be helpful for you to find some reviews about the add on party at Tony's from this past Christmas. A nice cross section of them may give you an idea of what you may experience at the Halloween version!