I generally agree with Frank--my addition is that there are a lot of living music traditions that many people who consider themselves experts on folk music know nothing about. Also, I think that American Jazz is a folk /raditional music form, and that it is the driving force behind 'American" music of all kinds.

Also, a lot of music is defined by it's association with a specific place, time, and subculture--like garage music, but we don't really have a term to distinguish those sorts of music from folk and traditional music--