Why were Germanic languages able to spread over much of northern Europe after 500BC? Did they mostly replace Celtic?

A recurring theme of European history is the "drift" south--toward warmer climes. For instance, "Nors*m*n" left Norway and ended in Normandy, Swedes migrated to the south shore of the Baltic; Poles left the Baltic and headed toward the Balkans and the modern Ukraine, etc.

The Celts "started" (around 500 B.C.) in modern Poland, Austria, Germany, and France (known at that time as Gaul). Over the next thousand years, they drifted (mostly) south to Iberia, Galatia (in modern Turkey), parts of Greece, and also "Cisalpine Gaul," that is "Gaul" or northern Italy south of the Alps.

"North Germans" started in what we know as "Scandinavia. Some of them stayed there, but others crossed the seas to the south shores of the North and Baltic Seas. When Celts made their migration south, they created a vacuum in modern Germany, Austria, Poland, Netherlands, etc., that the North Germans could fill. (The Celts stayed in Gaul, and it was not until the middle of the first millennium that German tribes such as the Franks could penetrate into what we now call "France.")

Put another way, the "migration" of the Germanic languages followed the "migration of people." There was "some" (but relatively little) conversion of people from one language to another.

I'm seeing two different questions to address in here: What happened to the Celts, and Where did all these Germanics come from?

What happened to the Celts? They got culturally absorbed by the Romans.

The first thing that you should notice from the below two linguistic maps from 500 BC and AD is that the Green Celtic areas have been almost entirely absorbed by blue Italic. Some is also now purple (for Germanic) but all of that area was first taken over by the Romans, and most continues to speak Romance languages to this day. There was possibly as much voluntary absorption as there was genocide on Celts, but the modern result is the same. If you are looking for culprits, you need look no further than the Romans.

^{500BC 500 AD}

Where did all the Germanics come from? There was basically a suction effect, pulling them into Roman-held western areas.

Their homeland appears to have been the western Baltic Sea coastal areas. They spent the next few centuries expanding into what were likely non-farming (so lightly-held) areas north of the Roman Empire back to the Black Sea. The victims of this movement were likely Thracian, Slavic, and/or Iranian tribes.

The Roman areas were relatively depopulated in this era. McEvedy and McGrath report that the Roman Empire's population dropped by about a fifth from its 2nd Century apex to the 4th, and then another 20% in the next two centuries (so about a third in total).

Whatever was going on, it didn't seem to hit the Germanics and Slavs as hard. As McEvedy put it:

For the population nadir coincides with the age of the Vikings and Varangians, and the intense activity in which these people engaged strongly suggests that, whereas there may have been less people in Europe as a whole than there had been 500 years earlier, there were a lot more Scandinavians and Russians.

Secondly, the Germanics during this same period had most of their territory conquered from the East. This left a large amount of Germanic tribes crowded into a very small amount of free Germanic territory, abutting a lot of recently depopulated Roman territory.

Below are small crops of Colin's maps for 362 and 451 AD respectively. The thick solid lines are Roman borders, the small dotted lines are Germanic borders, and the thick dotted Hun. The areas shaded with vertical lines are controlled by Celtic speakers.

Nature abhors a vacuum, so the result was probably inevitable: The Germanic tribes moved West.