Typical tango nightmare
The music begins. Joe Tango asks someone to dance. The floor is a bit crowded, which makes Joe a bit tense. The song is unfamiliar, which makes him more tense. The partner is someone he would like to impress with his tango skills: more pressure! Suddenly, Joe can only remember three moves. His brain freezes, and for a moment, he can't remember even a single move. Freak out time!
If you lead tango, I am sure this has happened to you before. For some dancers, this is how it feels at the beginning. For others, this is how it always feels when the room is crowded. People say to me, "I went to [x] milonga, and it was too crowded to dance, but YOU looked like you were having fun and doing cool moves!" (in an accusing tone of voice). "How did you do that?!"
How I deal with lack of space
The reason I don't freak out in crowded spaces, is that I had the equivalent of learning to drive in Boston as my training for learning to lead tango. Three years into tango, I spent four months over the space of two years, dancing in Buenos Aires. I led a lot at Torquato Tasso, La Viruta, even at El Beso.
My Spanish was eight weeks old when I first visited Bs As, so I had no idea how much negative attention I was attracting by leading. Some of the guys said rude things about "women drivers" and some women refused to dance with me. However, many guys simply tried to get me to run into them so that they could point out how badly I lead. Others just tried to run me off the dance floor.
I learned to protect my partner from other couples and from the tables at the edge of the floor. I saw that everyone else seemed to be leading just fine in small spaces, and copied their moves. I learned that a well-planted axis (an ample butt helps) keeps other leaders from taking your space. I experienced following good leaders with no space to maneuver, and alternated that with leading in the same spaces.
If you can't make it to Buenos Aires, go to crowded practicas. Or, set up chairs in your practice space, and dance around them. Attend classes focused on dancing well in small spaces. Practice is the only way to learn to do this.
How I remember moves easily
I have discussed how I arrange my vocabulary of tango moves in a way that makes it easier to remember more moves than my short-term memory has slots for recall. Here is an example of some moves from a student's lesson:
Apart from that, I practice moves in different combinations. I practice them to the right and left. I practice them as a leader and as a follower. This gives me more ease in recall, as I don't have to follow the same brain path to find a move; there are lots of connections between each move and at least several other moves.
How I deal with unfamiliar songs
At this point, I only hear a new song a few times each year. Very few of the tangos, valses and milongas that DJs play are strange to me, so I rarely have this problem anymore. So, the easy answer is: listen to tango all the time :-)
A more useful answer when you are already on the dance floor: tune into the "flavor" of the music. Explore the music with your partner. The next time you hear that tango, you will dance it better. Approach it as a new adventure, not a roadblock to good dancing!
One outstanding problem: shyness
I don't know the answer to how to deal with the nervousness that accompanies dancing with someone who you are nervous about leading. I get nervous when I dance with someone new who is above my level, even though I have danced tango for twenty years! Being a shy person, I think I will always struggle with this part of couple dancing. I just try to remember that they would like to enjoy themselves, and I try to give them a sensitive, connected, energized dance.