Well ... actually, a lot of medieval buildings were 3 and 4 story affairs if they were larger. The city limits were usually set by decree with different laws applying inside and outside, so as the population grew it often built up. Also, city walls are hard to maintain effectively if they're too long, so again - focus on density.

The actual population density of medieval cities was often ridiculously high, with thousands of people jammed together in what to us seem surprisingly small areas.

The city you've linked I would say, at a quick guess, you easily have 5,000 to 10,000 people living there.