While "traffic flow" is clearly not a term found in the local lexicon, Taxco's transportation peccadilloes shouldn't discourage a visit, and would-be headaches can be mitigated with planning.
A common mistake is to try and squeeze Taxco in as a day trip from Mexico City, when a better option is to commit ahead of time to at least an overnight stay.
That way, much of the nerve-fraying traffic can be avoided by driving directly to your accommodations when arriving in town and having the hotel staff park your vehicle. You also avoid difficulties in trying to park your rental vehicle along lanes often barely wide enough for a single car to pass.
Make sure to check beforehand, however, that your hotel offers off-site parking, because many smaller ones do not.
With your car safely secured, transportation choices are largely left to walking, or using the plentiful and reasonably priced taxi fleet. People old enough to remember and appreciate the 1970s will feel like they have been transported back in time, as most taxis for hire in Taxco are nostalgic Volkswagen "Bugs" or venerable VW minibuses.
Finally, unless your genealogy includes billy goats or longhorn sheep, everyone counting on their legs as their primary mode of getting around Taxco's topography needs to be mindful of their physical conditioning and that the city sits at 5,800 feet above sea level, and traveling anywhere by foot requires at least moderate physical exertion.
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