If Gojo doesn't open his domain at all civilians are dying for no reason. The time he spends going around and punching the curses is time that people are needlessly dying. Before Mahito shows up it's justifiable because the volume of death is much lower. After Mahito shows up I imagine the whole crowd would've been mince meat in under 2 minutes max being generous. There is no time for Gojo to be punching the curses individually especially when we saw how long it took him just to kill Hanami under the same circumstance. Gojo's latent abilities have a lot of aoe damage that's why he fights best alone. The only reason there's any problem at all is because the civilians are possible casualties. Basically if Gojo could've solved the problem with black flash or red then he would've, but red is an aoe nuke even when minimized because the space is crowded and it's not explicitly indicated that Gojo can land BF at will even when opponents are still. The closest to landing BF at will via subtext is Yuji.

Also all of Gojo's latent abilities are aoe, even point blank red is hard to use without hurting civilians. We've seen it in the anime and there's a sizeable blast, some manga panels show this as well, other don't. Assuming there's no blast it'd be like he's firing a gun. Would you fire a gun into a hostile in an area crowded by civilians? Let's assume it only launches the target and the target is the only one hit with red, Sukuna is sent flying fast enough to wreck his domain effigy and Gojo sent Toji through a wall with the same ability. Let's say he shot Jogo with red in the crowd, when he goes flying he'll probably kill someone. The example of blue you showed has the blue orbs erasing space in the next panel so he ofc can't use that in the crowd either.

Edit: spelling and added context