1. AC 759 queries lights on runway.
2. Atco, no matter how busy he was would have looked along runway before reassuring aircraft it was safe to land. ( Atco doesn't say, by the way you are lined up on the taxiway because that fact is not apparent to him. It's night remember).
3. AC 759 believes what ATC tells him and prepares to land.
4. AC 759 gets the shock of his life when he realises that the lights he saw actually WERE aircraft, pours on the power and narrowly gets away with it. i.e. he was right and so was ATC. They were just talking about two different "runways".
5. I am a bit puzzled about the almost light-hearted " he's on the taxiway" which suggests 759 still had some way to go and therefore time to correct his error. ( I doubt if the 759 PF needed any prompting from anybody. It must be possible that he didn't even hear it, what with the flight deck suddenly becoming a hive of activity).
6. Is there not a case for wondering if Visual approaches AT NIGHT to several close parallel runways and taxiways such as occurs at SFO are a suitable option when accurate instrument aids are available? Distance between 28R and taxiway C for example is only around 480 feet (centreline to centreline).