I'll second just about all of this, the one bit of colour I can add - years ago I had a summer job in a German-speaking (auto) shop where a majority of the workers, including some of the management were immigrants with a fairly wide range of German proficiency but everyone had picked up the onsite du/Sie conventions (along with some others like shaking hands at the beginning of the shift). It's, like you're saying, as much a cultural convention with contextual intricacies as it is a grammatical feature of the language.
Funnily enough, my example was also from Vienna in the 90's, a specific place and time somewhat more, err, uptight about these things than I'd say today's conversational German on average.
