From what I remember, chinese taipei (population 20m+) used to claim only ONE little league for the entire city so when it came time for LLWS they picked the best of the best. Little league changed their rules to make them split up into multiple teams based upon population size. That ended their total domination of the LLWS.
That's correct. Little League now has restrictions on population size for leagues to address the size disparity that had a major impact on the all-stars. Fairfax, VA has two separate Little Leagues in the spring that produce two entirely different sets of all-star teams because of the population. They combine the two leagues for fall ball, but it doesn't matter since there is no post-season play.
In NOVA, most of the 12U and younger travel ball programs start after the end of the LL season, and most of the better LL players are also involved with travel programs. You also see a lot of guys who coach travel teams working with LL teams. Once a kid ages out of LL, travel really takes over and LL Juniors and Seniors are generally composed of kids who like the game, but aren't interested enough or good enough for travel ball.