I was being entirely tongue in cheek about the applause thing. But like, since before then, people applauded solos, or before "classical music" became this rarified thing they applauded at particularly good bits of an orchestral piece, etc. I think in a lot of these instances the line between "entertained" and "appreciating a piece of art" is not a line. It's all kind of the same, and I certainly don't think it's separated in any meaningful way between then and now. For all I know they're still doing this at folk clubs, I don't go to folk clubs.
As a sort of corollary to that, I get none of those things you mention about Radiohead out of them, at least on a conscious level that I would ever definitively articulate. But I still like and appreciate their music a lot as art and entertainment. I would wager a lot of people clapping at Radiohead gigs are just thinking "that song is great and they played it great". Or maybe some of them are thinking "this is boring when are they going to play Creep?".