Tim and SS, there is at least one aspect you left out, and that is material quality. A manufacturer may make a cheaper guitar out of plywood, or they could build it out of scrap pieces of wood that have been glued together.
Wood density adds weight and also sustain, a desirable quality in a guitar. Woods like Mahogany and Ash are more dense, hence greater sustain. The older the wood is also has an effect on its density. THAT'S why the old Gibson's and Fender's are so revered for their tone!
So, we may have a cheaper guitar made out of Basswood instead of Mahogany, Ash, or Alder, and then yet, it may be made from either plywood or pieces glued together to form the body. I once saw a body made from eight pieces of wood. That's a tone killer, believe me!
As for the rest of the materials, you may find bridge plates just a bit thinner. If you can make a stamped metal part .010" thinner, over the course of a 100,000 piece run, you'll save a bundle on material cost. Have you ever taken apart a "vintage style" tuner? If you make that little stamped plate that holds everything together out of slightly thinner gauge material, you probably save quite a bit over the course of making 1,000,000 of them. That cheaper tuner may work by squeezing it tighter, but it won't work as well, especially over time. It does save money though, and that adds up to being able to build a guitar for less money.
There is a difference between the quality of both the materials and the workmanship that goes into say, a Fender vs. a Squier. Or, for that matter, between a USA made G&L and its foreign counterpart, the Tribute. If you look at an ASAT by Tribute G&L, you will find that it has the same exact USA made MFD pickups as its more expensive brother, but the Saddle Lock Bridge is a much cheaper casting than the part used on the American G&L.
Computer-aided design and manufacturing have brought up the bottom end of the guitar making business over the past ten or fifteen years. Parts that were once sloppily made are now held to much tighter tolerances, and that means a higher quality product in the end. That doesn't necessarily make a Squier the equal of an American Standard Stratocaster though.
One hundred or two hundred dollars buys you a hell of a lot more guitar than a comparable amount did twenty years ago, and that's solely thenks to the computers being used in both design and actual manufacturing. What hasn't changed are the use of cheaper materials and unskilled labor. There's where you will find the difference!
Constant gigging and practice use, over the course of forty or fifty years is what separates guitars. That the old Les Paul's, Tele's, and Strat's play as well or better today than they did back in the late Fifties is a testament to the quality that went in to them, both in materials and build.