You are absolutely right about the squares. Even all the little towns are going to have a main square where people gather for shopping or to go to bars and restaurants. That being said though a lot of those are kind of getting very quiet in the recent years as a large number of shopping mall are driving people away.

Even though I do not have a full information about the violin production in the Czech Republic I personally believer that it has a lot to do with the traditions and the fact that the Cezch Republic has produce a lot of great musicians and composers in the past.