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He was talking about something not related to your current issue. He meant using roads to create blocks on the suggested guidelines, this gives buildings the correct amount of space to upgrade into higher densities. If you build a circle, the outer ring might upgrade if given the space, but the inner ring is going to be stuck on low density unless the circle is really big. Looking at your setup I can tell most of those buildings are never going to upgrade to medium density.
I should also mention that the "pathfinding" for both traffic and sewage can't really handle circles. They get stuck in them often, or sometimes go around and around for no reason. Overall circles just don't work in this game.