Sink capacity, nitrogen (N), and dry matter accumulation (DMA) all play essential roles in promoting high rice grain yield, but their relationship is unclear. Here, a field experiment was conducted from 2020 to 2021 with Zhuangxiangyou Baijin 5 as the test cultivar. Two rates of N (T1 = 90 kg ha−1 N and T2 = 180 kg ha−1 N) and three transplanting densities (272,000 hills ha−1 (M1), 238,000 hills ha−1 (M2), and 206,000 hills ha−1 (M3)) were used to investigate rice grain yield and corresponding yield attributes. The results showed significant differences in rice yield, sink capacity, N and DMA, and the leaf area index (LAI) at the heading stage among the different treatments. The results showed that the output of T2M1 was the highest in 2020, increasing by 16.6% compared with the lowest output, while the output of T2M2 was the highest in 2021, increasing by 11.9% compared with the lowest output. During 2020, the highest sink capacity, LAI at the heading stage, and maximum dry matter accumulation at the maturity stage of rice were recorded in T2M1, while the highest N accumulation was recorded in T2M2. Furthermore, the sink capacity, as well as levels of N and DMA, of rice in 2020 was higher in T2M2, and the LAI was higher in T2M1 at the heading stage. Correlation analyses showed that yield was significantly positively correlated with N and DMA. In addition, a significant positive correlation between sink capacity and DMA was observed during both years, while a significant positive correlation between sink capacity and N accumulation was observed in 2021. Thus, we conclude that a high sink capacity can increase rice yield by increasing N and DMA because a high sink capacity is the internal driving force of high rice grain yield. In conclusion, the T2M1 regimen is a promising approach for improving the grain yield of paddy rice.