El oeste de la península tiene menos gente en octubre, y por eso mi hermana quiere que volvamos entonces.

In this sentence, el oeste means the west as a geographic area, so Spanish normally uses the definite article.

• el oeste = the west
• el este = the east
• el norte = the north
• el sur = the south

So El oeste de la península means the western part of the peninsula or the west of the peninsula.

De la península means of the peninsula and specifies which west we are talking about.

• el oeste = the west
• el oeste de la península = the west of the peninsula

Without de la península, the phrase would be much less specific.

Spanish often uses tener in ways that sound different from English. Here, tiene menos gente literally means has fewer people, but in natural English we would often say there are fewer people or it is less crowded.

So:

• tiene menos gente = literally has fewer people
• natural meaning = has fewer people there / is less crowded

This is a very normal way to express population or crowd levels in Spanish.

Gente is a very common collective noun meaning people in general. In everyday Spanish, menos gente is much more natural than menos personas in this kind of sentence.

• menos gente = fewer people / less of a crowd
• menos personas is possible, but it sounds more formal or less natural here

Also, gente is grammatically singular, even though it refers to many people. That is why you say:

• hay mucha gente
• hay poca gente

not hay muchas gentes in this context.

Por eso means because of that, for that reason, or simply so.

It links the first idea to the second:

• El oeste de la península tiene menos gente en octubre
• y por eso mi hermana quiere que volvamos entonces

So the logic is: there are fewer people there in October, and for that reason my sister wants us to go back then.

Because the subject changes.

• quiere volver = she wants to return
• quiere que volvamos = she wants us to return

In the sentence, mi hermana is the person who wants something, but nosotros are the people who would return. When Spanish has one person wanting another person to do something, it usually uses:

querer que + subjunctive

So:

• Mi hermana quiere que volvamos = My sister wants us to return

It is subjunctive because it comes after querer que, which expresses desire or wish about another person's action.

Pattern:

• querer que + subjunctive

Examples:

• Quiero que vengas. = I want you to come.
• Quiere que volvamos. = She wants us to return.
• Queremos que ellos estudien. = We want them to study.

This is one of the most common triggers for the subjunctive in Spanish.

Volvamos is the present subjunctive form of volver for nosotros.

The verb volver is a stem-changing verb (o → ue), but in the nosotros form of the present subjunctive, that stem change does not appear.

So:

• infinitive: volver
• yo form: vuelvo
• present subjunctive base: from vuelvo → remove -o → vuelv-
• nosotros subjunctive ending: -amos
• result: volvamos

This is normal for many stem-changing verbs:

• quiera, quieras, quiera, queramos...
• duerma, duermas, duerma, durmamos...
• vuelva, vuelvas, vuelva, volvamos...

Here, volver simply means to return / to go back, and the destination or context is understood from the sentence.

• volver can stand alone: Queremos volver.
• If you want to specify the destination, you can add it:
  • volver a Madrid
  • volver al oeste
  • volver a la península

So quiere que volvamos entonces means she wants us to go back then, with the place understood from the context.

Here, entonces means then, referring to that time — in this case, October.

So:

• en octubre introduces the month
• entonces refers back to that month: then / at that time

It is not the logical then of if X, then Y. It is a time word here.

Yes, both refer to time, but they do different jobs.

• en octubre gives the specific time for the first clause
• entonces refers back to that time in the second clause

So the structure is:

1. In October, the west of the peninsula has fewer people.
2. Therefore, my sister wants us to return then.

Using entonces avoids repeating en octubre.

Yes, it could, but it helps make the cause-and-effect relationship explicit.

With it:

• ..., y por eso mi hermana quiere que volvamos entonces.
• ..., and that’s why my sister wants us to go back then.

Without it:

• ..., y mi hermana quiere que volvamos entonces.
• This still works, but the connection feels less clearly stated.

So por eso is there to underline the reason.

Yes, it is natural and correct. It sounds like standard neutral Spanish and works well in Spain.

A speaker might also say similar things like:

• En octubre hay menos gente en el oeste de la península...
• El oeste de la península está menos concurrido en octubre...
• ...quiere que volvamos en octubre.

But the original sentence is perfectly normal.