Yeah, the British are partly the way they are (reserved, standoffish, polite) because they are a small, crowded, island nation. Japan is the same but more so.
I always heard it described that Japanese are shy to a large part for the same reason Scandinavian/Nordic people are shy -- a very violent society, which isn't violent anymore. The shyness is a historic anacronism.
(The shyness comes from that in a large fraction of quarrels someone(s) will be carried away, in pieces. You don't cause offense without very good reason. Not sober, anyway.)
