In dynamic and crowded environments, realistic pedestrian trajectory prediction remains a challenging task due to the complex nature of human motion and the mutual influences among individuals. Deep learning models have recently achieved promising results by implicitly learning such patterns from 2D trajectory data. However, most approaches treat pedestrians as point entities, ignoring the physical space that each person occupies. To address these limitations, this paper proposes a novel deep learning model that enhances the Social LSTM with a new Dynamic Occupied Space loss function. This loss function guides Social LSTM in learning to avoid realistic collisions without increasing displacement error across different crowd densities, ranging from low to high, in both homogeneous and heterogeneous density settings. Such a function achieves this by combining the average displacement error with a new collision penalty that is sensitive to scene density and individual spatial occupancy. For efficient training and evaluation, five datasets were generated from real pedestrian trajectories recorded during the Festival of Lights in Lyon 2022. Four datasets represent homogeneous crowd conditions -- low, medium, high, and very high density -- while the fifth corresponds to a heterogeneous density distribution. The experimental findings indicate that the proposed model not only lowers collision rates but also enhances displacement prediction accuracy in each dataset. Specifically, the model achieves up to a 31% reduction in the collision rate and reduces the average displacement error and the final displacement error by 5% and 6%, respectively, on average across all datasets compared to the baseline. Moreover, the proposed model consistently outperforms several state-of-the-art deep learning models across most test sets.