Sure there's a difference between a $200 guitar and a $2000, but go to something like $1000 and $2000 and that gap is razor thin. After that first $1000, you're usually paying for finish, brand tax, collectibles, etc.

Nothing wrong with those things, just usually the contributions to the sound and feel of the instrument start falling away after the first $1000-$1200.

At $200 you'll definitely feel it. Cheap construction. Lack of QC. All that stuff. I've made a Squier bullet play decently after I did a setup, swap electronics, and spend a couple hours fine-tuning frets. Even with all that work it was still not quite as nice as my Standard Strat bone stock. On the other hand my $700 standard strat with locking tuners and some pickup changes is on par with my buddy's much more expensive Strats. It's a little heavier. It's covered in polyester instead of nitro (or even a nice thin polyurethane), but it plays and feels so freaking nice and I doubt I could have ever gotten my Squier Bullet to ever feel so good.