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In my mind, only people that are already excited about the candidate would go. This means the attendees are mostly voting for the candidate anyway. Obviously this is not the whole story, rallies must be beneficial or candidates wouldn't do them. So how do rallies gain candidates votes?

Campaign rallies generate media attention. The media attention can gain votes for the candidate.

Another issue is that campaigns don't necessarily need to gain supporters from the rallies. If the rally makes existing supporters more likely to vote, that also helps. You'll hear this referred to as turning out the base.

Campaign rallies also might increase donations, which are also valuable to candidates. Or they might increase volunteers, which are valuable to campaigns. Or they might encourage attendees to go out and talk about the candidate. That word of mouth advertising can be more effective than other forms of advertising.

Successful rallies achieve two key things:

1. They reinforce existing supporters. At a rally the candidate has a platform where they can 'preach their good word' to their followers, and bask in the social energy of the event.

Humans are social creatures, and we like to feel like we both belong to a group and that our views and ideas are supported by the group. Those who attend a rally then surround themselves with like minded people and help reinforce that their ideas are 'clearly very good', because why else would all those other people be there?

This leads to the second key point:

2. They reinforce the candidate's legitimacy: To anyone who wasn't already a supporter and didn't go to the rally, the social power of said rally may still be an important factor. That candidate has support, large groups of "your fellow citizens" clearly think they're a good idea, so maybe you too should think that they are a good idea...

If you have two candidates offering the same sort of ideas, and seem to view things the same way as each other, then which one would you want to vote for? The one who can fill stadiums with supporters, or the candidate no one is talking about?

The ideas in other answers (get out the vote, press coverage, donations, reinforcing legitimacy) are great points about general elections. However, primary elections -- when few voters are truly committed to one particular candidate -- have their own dynamic.

Given a choice between a candidate who has made a visit in a voting region and another who hasn't bothered to make an appearance, many voters in that region will choose the candidate who campaigned there. An appearance makes voters feel that the candidate "cares about us and our issues." The effect is even powerful enough to overcome other factors such as name recognition, campaign budget, and advertising.

This effect has been observed in the early contests for the U.S. Presidency. There are many examples of already-well-known candidates skipping the Iowa caucus or the New Hampshire primary. In every case, they placed behind obscure candidates who made appearances in the state. It doesn't matter if a campaign is wealthy enough to buy commercials; "retail politics" in person is the key to winning. So you see lots of hopefuls campaigning in person in Iowa and New Hampshire. An obscure candidate who beats a well-known candidate then gets press coverage, legitimacy, and donations.

Probably it's a case of candidates believing it has benefit more than actual benefit.

Occasionally a rally will produce an iconic image that winds up being very powerful. I recall a particular case not very long ago. Two politicians held rallies at the exact same time within sight of each other. One rally had overflow beyond the space that could possibly accommodate people inside, and they were outside watching on a "jumbotron." The other rally had plenty of empty chairs. And the TV coverage managed to catch this in a shot of the low-turnout candidate. There's this guy bad-mouthing the other guy, while standing in front of empty seats, and the other guy's overflow crowd is filling the background, with the other guy's image visible on the big-screen.

Also, there's the idea of a Pep Rally. If you've never been in a crowd that was agreeing hard then it won't have any possible meaning. If you have then you won't doubt. The first time I experienced this was at a science fiction convention where they showed vids of the Delta Clipper going through its paces. The crowd growled their approval.

Getting a bunch of people chanting, for example, has an effect on the brain. Chanting makes you feel good if you agree, and bad if you disagree. So the tendency is to agree in order to get along with your neighbors. And the rewards are pretty quick. Suddenly you and your neighbor are pals.

And occasionally the chanting will produce further iconic images. Chants of CNN Sucks! when the CNN reporter is trying to do a live report is pretty high on the list of "photo-bombs."

There is also an aspect of social proof. This is the idea that people in a crowd who agree will have a strong tendency to pull in any stragglers and get them to agree as well. The canonical example is a laugh track.

Like entrepreneurs use money to make more money... Similarly campaign gets you more supporters (not always the case there's nothing is sure shot in business and politics)

So First let me explain what is campaign, and what is modern day campaign

Campaign: It is like advertising. Campaign's central aim is letting the mass know about the initiative a party has in mind for a better leadership and making them(the mass) realise the importance of that in short it helps in representing the voice of the party, they tell what they are going to do for betterment of ecosystem if they win (the whole collection of ideas is called as manifesto). For that party travels from place to place. But Now the question is

What's the need of so much crowd for doing that?

Your Answer is

That's a human nature that If someone observes crowd or anything happening in front of them they develop a curiosity for that, more likely if there is a mass crowd. And that show pushes our mind to think about a question --- "He got that much of crowd who believes in his ideology, his idea must be something sense full, isn't it?" This forces the person to think about that idea and the thought process is controlled by subconscious mind, and our subconscious mind has already accepted him as a leader because a crowd of 100s of people - they be following because of something such a huge number can't be completely fool to follow him without any reasons- gradually he gets that much of fascination with that ideology of party that he starts following and supporting the party and thinking the possibilities of future and improvements of golden days and a inner zeal kicks in and that person ultimately he starts discussion and debates with his colleagues and when he founds the flaws in his friend or colleagues(according to his point of view) he tries to do correct it. That's may create a heated debate and people love to take interest in that too.

Now see how well that chain works.

Campaign showed a seed and it's now a plant due to our nourishing brain and it's non stop thinking process

And it's about classical campaign days.

Now a days there is technology and outreach to each and every person's mind party tries to implant itself by using that way, for doing so he pays the service provider to highlight their adds more and more increasing the likelihood of person to see it multiple times a day and gets his mind thinking about that see it's like classical days when parties paid for banners hoarding.

So coming back to question
Parties use the crowd to woo the crowd.

And

Sometimes where there is only a single party or power is centralised at single party it tries to show how powerful they are and what you might dire of consequences if you took action against the welfare of party.

A party pays for crowd but that isn't of anyone's business. What's the outcast of crowd it's the real business. Crowd might lure you. Like suppose if you are in exam hall of 100 people and your answer of question number 1 is B but whole class has filled C option as correct answer (considering whole class has same paper for sure) you'll most likely to change your answer. You'll join into the majority, adapt the same way they think.

No one wants to be left alone in human race.

Now a question comes why one particular party wins with majority of votes and the other looses badly

That's because of multiple reasons but mostly because---

i. Ideology/Manifesto of the party.(CAMPAIGNING IS THE WAY OF ADVERTISING IT) What his plans are is the most important thing that plays in deciding the fate of party's future. The party with best plans triumph the throne. (That's entirely another topic -- Do they follow their promises after winning or dump it in trash )

ii. Unity of the party candidates. If there's someone who's betraying behind the scenes, you most probably can't win.(CAMPAIGN'S PLANS AND ITINERARY IF LEAKED MAY SEVERELY AFFECT THE IMPULSE OF CAMPAIGNS)

iii. Party with bad history or bad image of the leading candidate - the face of party-(IT'S HARD TO MAKE THE PEOPLE PAY ATTENTION ON YOUR CAMPAIGN IF THE LEADER IS MALIGN)