Under tower and balcony, By garden-wall and gallery, A gleaming shape she floated by, Dead-pale between the houses high, Silent into Camelot.
Now, at last, we enter the city of Camelot that we've heard so much about.
The lady floats by the towers, the gardens, and the houses of the town. She is described as a "gleaming shape," completely pale and cold. She is also silent; her song is over at last.
The images in this last part of the poem are simple and clear, and that's part of their power.
Out upon the wharfs they came, Knight and burgher, lord and dame, And round the prow they read her name, The Lady of Shalott.
Everyone in the town comes out to see this sight. The people the speaker mentions are wealthy, noble people (a "burgher" was a wealthy man in a medieval town, usually a merchant or a businessman). They all crowd around by the river's edge and read the name written on the front of the boat.
Who is this? and what is here? And in the lighted palace near Died the sound of royal cheer; And they crossed themselves for fear, All the knights at Camelot:
They have a lot of question about this mysterious sight. Who and what is this? It's a disturbing sight, and as the word gets out a party in the castle nearby quiets down. It's scary enough that even the famously brave knights of Camelot make the sign of the cross for protection.
But Lancelot mused a little space; He said, "She has a lovely face; God in his mercy lend her grace, The Lady of Shalott."
The poem closes with Lancelot's reaction to what he sees. He stops and thinks for a moment, and then declares that the lady is pretty. He also says a little prayer for her, hoping that God will have mercy and protect her now that she's passed on.
This probably wasn't the meeting with Lancelot that the Lady was hoping for. In the end, he comes too late, and she dies sad and alone. Sorry, no happy ending for the Lady of Shalott.