"Rather than purchasing from poorly-trained people who know nothing about technology doing sales at a big-box store, one went to local computer stores where one could talk for hours to people who knew what they were doing and could answer nearly any question one would have."
Most of the early store owners were enthusiasts (read: Geeks) so they usually knew the answers. Downside was they could BORE you for hours, too ... (If you could tolerate the bad breath & B.O.)
"It even appears that programming used to be something much more common than it is today"
Partly because most (all ?) of the early machines had BASIC built in, so programming was a natural function. Also there were fewer ready written apps, so if you needed something, you could write it yourself. That's what 'computing' meant in those days. Nowadays there are multiple apps to do almost anything you care to name. Why reinvent the wheel ?
"So, what happened to the hobby of computing? When did all of the small computer stores close down"
They closed when they couldn't make enough cash. Often because the owners spent hours talking to customers rather than selling them something.
