My town has more than 10,000 people but it strongly resembles the painting you posted. It has little industry but is healthy because it is what is known as a “bedroom community” (which does not mean that everyone is busy sleeping around, it means that people live here but work elsewhere /s).
The town I grew up in is under 10,000 people and I have occasion to visit now and then. When I drive through the streets I walked as a kid, it depresses me every time. The businesses on Main Street are mostly gone and the few that remain are dismal. Empty storefronts everywhere where it was once the typical small town Main Street out of a Norman Rockwell painting. The homes where I used to deliver papers are run down as the older generation has passed on and the new owners do little with them. Crime and heroin are big problems. It is painful to know what it once was.
I’m fortunate enough to be in an outer, exurban town within commuting distance to a city. Drive ten miles further and it’s really dismaying, what has happened. Formerly thriving, proud towns are falling to their knees. But for the grace of God, it could be me, stuck there with little prospect of selling my house for anywhere near what it should be worth, dwindling employment prospects and the town going to seed.