This is a common misconception. They do continue to happen there, except it's less transit traffic and more the increased local traffic. The problem is worse in major towns, where the increased highway traffic feeds into main roads whose capacity can't be increased beyond a certain limit (houses can't be demolished that easily for extra lanes), leading to increased traffic jams.

is that strip mall or subdivision any better because it's by a major two lane road rather than a highway?

Yes, because at least mass transport by bus is more likely to happen, and the development is more likely to be at least on the edge of town rather than metastasing in the middle of previously green areas. But I agree that sprawl is a broader problem than to be caused by highways only.

mass transit networks are great within cities or between major centers, much less so otherwise.

Less so is relative, and not a constant -- which is kind of my point, with current policy enhancing the convenience of car-based travel and reducing that of especially countryside mass transit.

_{*Lunatic*, n.
One whose delusions are out of fashion.}