This is what bothers me the most with the car-centric mindset so many people have. You have to choose in-between being car free in a very dense area or car dependent in a rural area. In reality small towns can be just compact enough to allow many small businesses to thrive, as it's the case in other developed countries. Malls are the main source of problems...
Small towns don’t typically have malls. Small towns are more on the order of “oh we just got a walmart”. I think you’re conflating small towns with mid to large towns or small cities.