Most index options are options on futures, so to delta hedge a single option position, you trade the corresponding future.
For example, say you sell 10 delta 50 calls on the CME Emini S&P. To delta hedge them, you'd buy 5 CME Emini S&P Futures with the same expiry date as the options.
As you say, you could hedge with the basket instead, but for practical purposes the futures are usually easier. If the futures go out of line with the basket you can always trade an index arb strategy.
Now market makers normally dont just trade one option - they build a portfolio of options by buying and selling both call and put options at different strikes. Once you start combining option positions for the same expiry, you can sum the delta for your portfolio and just hedge the remaining delta.
Options have other risk sensitivities though, so to a certain degree you also need to hedge gamma, vega, etc. That's normally done by adjusting your prices so that if for example you are long vega (you've bought a lot of options), you adjust your prices down for both calls & puts to make it more likely that you'll sell options (and hence reduce your overall vega).
It's obviously a bit more complex than that in practice, but you get the general idea.
Btw, you can check out some example index option/future contract specs here: