Hi Les,
I'd say that many of your suppostions are accurate. A Derbyshire MS (ca. 1800) that I've been through includes both dance and church music - in separate books - and the latter may well have been used by the local church musicians who, like Hardy's church band, would have played for dances as well. The dance music book also includes a few classical pieces and a couple of stage songs of the period. Another book has surfaced that contains bass parts for many of the same tunes.

It's my understanding (though I can't find a reference just now) that the bands were often made up of musicians from local militia, probably former soldiers, which would explain the number of marches in some tunebooks of the period. I tend to agree with Rozza that the variation in some of the well-known tunes suggests that they were not all copied from printed sources.

There's an interesting acoount (can't rmember where) of a Derbyshire village band in 1874, composed of local publicans, shopkeepers, farmers and miners, playing string and woodwind instruments and rendering 'The Hallelujah Chorus'.