I've lived all over the US (including the midwest) and it's the same everywhere: the message is that /our/ arbitrarily-shaped state has a unique and amazing culture, and if you don't like it you can move to ${our_major_sports_rival}. It's an easy way to move merchandise like bumper stickers and beer koozies, and a low stakes thing to incorporate into a (consumption-based) personal identity: wearing a Michigan State sweatshirt is a noop in contrast to wearing a hijab, which is possibly a quite dangerous thing to do. This kind of thing (e.g. lawn signs that say rude things about other college football teams) is mainly harmless IMO, but the real deficiencies you've identified are true of all of North America (Canada and Mexico included).

It's not Minnesota that has a vastly inflated sense of its success as a liberal democracy, it's the whole continent. Americans have phrases like "manifest destiny," and "American exceptionalism" that speak to this. I can't speak to the specifics of how this works in Canada and Mexico, but I know it does.

It's not Minnesota that willfully ignores the centuries of horrifying genocide and slavery that underlie our every footstep, it's the whole continent. Any attempt to inject a little more verisimilitude into the stories in our school history books (the most recent notable one being the 1619 Project) is rabidly opposed by white supremacists who eventually "compromise" with actual history by adding a sidebar or a separate few chapters about the middle passage or Algonquin culture /without/ ever actually stating the central point that /the purpose of America always was, and functionally still is, to enslave and steal from black and native people for the benefit of (historically exclusively white and male) elites/. Again, this is a USA-centric view but my understanding is that similar dynamics play out in Canada and Mexico.