It is absolutely true that there is nothing to do in small towns. And by small I mean under 1,000 people. However, the school experience isn't always tied to the town experience.
I went to two different small high schools (graduated in '95), Pomeroy-Palmer and Orient-Macksburg. PP was a really good school with some great teachers, obviously good at basketball, but also good at many other things (jazz band award winners, physics olympics, FFA, etc.) - kids were very much involved and there were quite a few opportunities. I played football, basketball, baseball and golf there. For the most part, kids were very interested in moving on to college.
OM was a complete 180 experience. Not a very good school and some pretty lousy teachers. Didn't have a football program (shared with Creston), above average baseball team, terrible basketball team. Almost no one participated in band, choir, jazz band, etc. I would say the minority of kids at this school would go on to college, as most would stay in the SW Iowa area to work or maybe go on to SWCC to get a 2 year degree.