Time to change the engine or heavily upgrade it then?
If a town is meant to have 100+ people then there should be 100+ people there, not 20 npcs just cause the engine can't handle it. (IMO)
The problem with that is making the NPCs actually worthwhile. Ideally you want as many named NPCs as possible, with their own stories, personalities, etc. People like Maggie, Billy Creel, Nathaniel, Gob, Nova, etc. All of those NPCs had a dozen or less lines of dialogue. They had just enough details and personality to have character. There can only be so many "Insert-Name-of-Town Citizens" generic NPCs running about before it gets frustrating. If you truly had 100+ NPCs running around, and only 20 or so where actually named characters, how long until you went insane trying to track down someone to hold a conversation with? Much better to have fewer, more meaningful NPCs. Quality over quantity as they say.
It has always been implied in the Fallout games that the cities and settlements have many more citizens than are actually shown. New Reno for instance is said in Fallout 2 to have thousands of people ("if you can call them that"), yet you won't find near that number. Vault City is probably the most accurate representation of a city in the entire series, as it supposed to only have 109 citizens, and you can probably find and count that many in the game.
Regardless, a certain level of abstraction is required in an open world game like this. And that is hard to do. If they put in NPCs, players expect to be able to talk to them, shoot them, rob them, etc. If they put in more buildings and houses to imply more people live in a city or settlement, players will expect to be able to go in those buildings and explore. Buildings as simple facades with no way to enter them may work in a GTA game, but not in an RPG where the expectation is that if you can see it, you can explore it.
It was easier for old RPGs to have more generic NPCs. No dialogue had to be recorded, and the NPCs could stay in one spot and never move. With Radiant AI, even those generic NPCs, like the Megaton Citizens, have a schedule that they follow, and there must be places for them to sleep and eat, and tasks to do. And even generic NPCs now need recorded dialogue to spout off when activated.
I'm all for more NPCs in towns and settlements, but I want them to have a purpose and a name, even if that means there aren't as many present.