In this paper, congestion dynamics along crowded freeway corridors are modeled as a conservation law with a source term that is continuous in space. The source term represents the net inflow from ramps, postulated here as a location-dependent function of the demand for entering and exiting the corridor. Demands are assumed time-independent, which is appropriate for understanding the onset of congestion. Numerical and analytical results reveal the existence of four well-defined regions in time-space, two of which are transient. The conditions for the existence of congestion both in the freeway and in the on-ramps are identified, as well as the set of on-ramps that are most likely to become active bottlenecks. The results in this paper help explain the stochastic nature of bottleneck activation, and can be applied to devise effective system-wide ramp metering strategies that would prevent excessively long on-ramp queues. Key words: Continuum Approximation; kinematic wave model; traffic dynamics; congestion.