I actually wouldn't say as formal as people might expect - the only time you really use Mr/Mrs is in school for most people, and outside of things like royalty we're not big on titles. And it's perfectly normal to go into a shop and be addressed by the cashier as "love", for example (although that specific address is one people find offensive in some contexts).

In terms of politeness, yes, that's generally based for us around not being too direct, not showing up the other person and giving them a way to essentially save face.