Three women and two men are standing at the foot of a large staircase holding stringed instruments and a clarinet.
Five people are standing by a staircase.
Five people is a rephrasing of three women and two men.  At the foot of a staircase implies they are by the staircase.
"standing by a staircase" is a rephrasing of "standing at the foot of a staircase"
The people standing by the staircase were three women and two men.