Learn German: Du stehst gern im Mittelpunkt. Dagegen mag ich die Menge nicht. - You like standing in the center. On the other hand, I do not like the crowd.

Dagegen (on the other hand / by contrast) is an adverbial connector. In German, when an adverb starts a sentence, it takes up the first position. The verb must always stay in the second position (the V2 rule), which pushes the subject ich into the third position, right after the verb.

Could I use aber instead of Dagegen here?

Yes, you could say Aber ich mag die Menge nicht. However, notice the word order difference. Aber is a coordinating conjunction (position 0), so it does not affect the word order. Dagegen is an adverb (position 1), forcing the verb into position 2. Using dagegen is also slightly more emphatic about the direct contrast between what you like and what I like.

Does im Mittelpunkt stehen literally mean standing in the center?

Literally, yes, but it is mostly used as a common idiom meaning to be the center of attention. So, Du stehst gern im Mittelpunkt translates best to: You like being the center of attention.

Why is nicht placed at the very end of the second sentence?

Here, nicht negates the entire action of liking the crowd. When negating a verb that has a direct object with a definite article (like die Menge), nicht typically drops to the very end of the clause.