Macromolecular crowding in biological context has received significant attention recently, as it has become clear that many of our experimental approaches using dilute aqueous solutions of biomolecules are quite simplistic compared to true biological systems. True biological environments are tightly packed, with biomolecular concentrations ranging upwards of 400 mg/mL, and this crowding has been shown to have a profound effect on processes such as protein folding, stability, and small molecule binding. While tremendous focus has been placed on crowding effects on cytoplasm and proteins themselves, it follows that biological membranes are also susceptible to structural, functional, and dynamical consequences of crowding, and there is no question that the large volume of proteins in biological membranes contributes to this. Here, we explore these consequences in model lipid bilayers, probing lipid hydration, hydrogen bond networks, and hydrogen bond lifetimes at the lipid-water interface and their dependence on transmembrane peptide concentration. To do so, we have employed two-dimensional infrared spectroscopy (2D IR) in conjunction with molecular dynamics simulations to directly probe the lipid-water interface of DMPC vesicles with various loading concentrations of pH (Low) Insertion Peptide (pHLIP). We have found experimentally non-monotonic dependence of interfacial dynamics as a function of increasing pHLIP concentration: at low peptide concentrations dynamics are faster than in pure DMPC, whereas at high - approaching biologically relevant - concentrations, dynamics are significantly slowed. Using our computational models, we determine that this phenomenon is rooted in water ordering at the interface. In pure DMPC vesicles, simulations reveal ice-like water ordering at the interface. At low peptide concentrations, interfacial water becomes disordered leading to fast dynamics, and at high peptide concentration the water molecules are orientationally constrained, effectively dehydrating the interface.