I attend the Renaissance Festival every year, and have been to many festivals and fairs in my life. At this point, I try to avoid them the best I can. As an introvert, I am sensitive to sounds and being around a lot of people. However, I have found if I have a task to focus on (and take my focus off my introversion) it helps me. And, as a writer, my task is observing.
Writers often talk about how important people-watching is, and I agree. Understanding how people work helps immensely with writing characters. Thus, I find it both helpful to my sanity and to my skills as a writer to people-watch especially when I go to very busy places.
At festivals especially, people tend to be in a partying mood. They are there to have fun (doesn’t mean a lot of them are happy, but then I don’t think those people ever are happy). It shows a certain picture of people.
So, the next time you go to a festival/fair, stop for a few moments and just watch people. See how they react. What they want to do? How they interact with who they are with/people working at the fair? Jot down a few notes. It might inspire you as well.