"The old people are sitting on the bus, and the students are standing."
Translation:Az idős emberek ülnek a buszon, a diákok pedig állnak.
A buszon is correct for the usual passenger area of a bus. It actually matches English - "on the bus" Also a vonaton (on the train) and a villamoson (on the tram) are the same way.
(Also, for what it's worth, very few people know the latinate words like "inessive" and so on. For Hungarian it's usually easier just to say "the -n ending" or "the -ban / -ben" ending or whatever.)
Is this really so bad? Az idös emberek a buszon ülnek, és a diákok állnak.
És isn't really the right conjunction here.
It's kind of weird - nonparallel - to have a buszon ülnek in the first part and then a diákok (pedig) állnak in the second part. It's as if you're trying to stress a contrast between "on the bus" versus "the students" which doesn't really work.