all that traffic

Good afternoon, everyone.

Newscaster: ...Every year, City Select magazine lists the best places to live in the United States, and this year number one is right here in Charlottesville, Virginia.
Reporter: ...I’m standing here with Kenny Flint, a college student and Charlottesville resident. Kenny, how did you decide to come to Charlottesville?
Student: I grew up in New York City—concrete everywhere, air pollution, all that traffic, you know.

Source: Oxford University Press - Open Forum 2-1

What does "all that traffic" mean in that context?

It means "all the traffic that one encounters in New York City".

It’s a natural, and very common, way of referring to how things are in a certain literal or figurative area. If you mention “all that [something]” — especially in a way that means it’s something you don’t like (e.g. if you ‘pull a face’ as you say it 👁 Wink ;)
) — to a native English speaker, they’ll immediately know that you’re talking about something that’s typical in whatever situation is under discussion.

all that traffic -> large numbers of vehicles on the road
all that traffic -> that [+noun] is used as an emphatic negative that also implies that the speaker objects to <noun>.
all that traffic -> an excesssive amount of objectionable vehicles on the road.

I suppose "all that traffic" just means "all the traffic there".

"You know" at the end suggests the speaker thinks that the person he's talking to is aware that all those things exist in New York. Since New York gets a lot of attention, it's probably true that the person does know all of that. "All that (= that large amount) of traffic that New York is famous for (most specifically Manhattan)".