I don't think people overestimate the cultural difference between Finland and Italy for example, they are extremely different.
The language barriers makes Europe much more culturally diverse, but also makes that diversity much harder to discover since you can't fully understand a culture without learning its language.
It is more like the cultural difference between Canada and Mexico, you don't have such a wide spread within USA. You have some parts that is more like Canadians, and some parts more like Mexicans, but Mexico to Canada is still a bigger cultural leap than anything within USA.