In SimCity, there are two different types of road. These are streets and avenues.
Streets are one square wide and avenues are two squares wide. All streets are the same width, so a dirt road can be upgraded to a high density street using the upgrade road tool.
In order to upgrade a street to an avenue, however, you need to destroy the old street and replace it with a larger avenue, which will remove all infrastructure that exists along the old street.
If you're in a situation where you already have the maximum capacity version of a particular style of road but don't have the space to replace it with an avenue, there are other options available. It is possible to build additional roads within the vicinity to alleviate the amount of traffic travelling down your currently over-crowded road. To do this, bring up the traffic data layer to see where all of the traffic is coming from, and build new roads that intersect the busiest streets to provide additional routes for your sims to travel down. The traffic data layer can be accessed using the 'All Data Maps' button in the bottom right of the interface, or by toggling the 'upgrade road' option.
In addition, there is the possibility of setting up mass transit. Mass transit works by building a depot (and adding additional trucks as required to increase the number of sims that can travel per day and reduce the wait time for busses) and placing stops. The region that a stop will cover is highlighted along the roads as you place the stops. For the maximum effect you will want to place stops along your busiest streets (see your data layer for traffic again) and ensure that the wait time for passengers is managed to ensure it doesn't get too high.
You can monitor wait time by bringing up the information screen for your mass transit depot, and you can monitor the amount of traffic a particular stop is attracting by bringing up the information screen for each individual stop.
Ground pollution typically stems from your handling of sewage. You are quite limited in your options to handle sewage, but must do so in order for your city to be properly inhabitable. You basically have three options:
Build a sewage outflow pipe. This option produces the highest amount of ground pollution, but is your only option in the early game without taking regional options into account. It should always be built as far away from your populace as possible.
Build a sewage treatment plant. This option is more expensive, but has the capacity to handle sewage treatment for larger cities and is modular. It also cleans the sewage instead of dumping it onto the ground, drastically reducing ground pollution. When one of these are built, all sewage outflow pipes should be demolished. Keep in mind that in order to build this, you will need to have a City Hall with the Department of Utilities module added somewhere in your city or region.
Send sewage to another city in the region that can handle the extra capacity, i.e. a city with a sewage treatment plant. There is a charge for this, but the benefits of getting that pollution out of your hands, and getting the extra development space is well worth it. This option has the most mutual benefit, as it eliminates ground pollution in your city, provides extra revenue for the destination city, and decreases region pollution overall by sending the sewage to an efficient and clean disposal facility.
Once you remove a source of ground pollution, the land will gradually "heal" over time, and become properly inhabitable again without adverse affects. This does take quite some time however, so you should always plan your city around areas you think would probably be uninhabitable.
EDIT: As pointed out by both Chromium and Dude in answers below, Trees will help clean up ground pollution faster.
IMPORTANT : If you exceed the capacity of your sewage treatment system, sewage will begin to back up across your city and cause ground pollution anywhere this failure takes place. If you are experiencing widespread ground pollution outside of your sewage handling facilities, you need more sewage disposal capacity.
Ground pollution is also generated by the low-tech level industry. Again, the best way to deal with it is to upgrade to a tech level that doesn't produce ground pollution by upgrading your education systems.
Best Answer
Step 1: Look at unsold goods. Bulldoze commercial of appropriate wealth levels until unsold goods are close to 0. Now those commercials will be taking in the right number of workers for the goods required. I expect this will free up ~2000 workers in your case.
Step 2: Bulldoze high density industrial... constrain it to medium density. You don't need super dense empty factories. I expect this will free up 3000-5000 workers in your case.
Step 3: Service buildings. Consolidate police and fire into fewer larger buildings. Each building requires workers while the extensions do not require any more workers. Check the number of workers at a service building by pausing the game, checking the city worker count, powering off the building, comparing the new worker count (you can power on the building at this point if you want to keep it). In particular, things like CoalMines and other specialization buildings require a lot of workers. Limit the number of these that you have.
Step 4: Residential density. If it's not all high density yet, you have room to grow. If you're having trouble balancing the traffic of low wealth residential, make a community college or university to upgrade your industrial and focus on medium wealth residential.