The difference between what is considered personal space in Cusco versus in the States was clear from the moment we arrived. Sidewalks and markets are crowded, and to get around, you need to turn and squeeze, maybe even brush other people. I find myself constantly saying "perdón", "permiso" or "lo siento" but rarely do I hear others saying it. People will even drive cars and bikes very close to you. I get the impression that it's more acceptable to squeeze by someone and get very close to them than to ask for more space. Ultimately, you're in physical contact, or near physical contact, with others much more in Peru than in the States.
This closeness is reflected in the shapes of the public spaces, like shops and restaurants. Shops are a fraction of the size of those in the States, but somehow seem to hold an infinite number of items. Things are packed everywhere, leaving little room for personal space when others are in the shop. The restaurants only typically have a few tables, and often they are really close together, like in Peru Juice. This forces closeness between people and erases our very American ideas of personal space.
Despite the high number of people packed into every space in Cusco, it is not that loud. When we travel as a group, we are by far the loudest people in the vicinity. So, personal space seems to be unimportant, but quietness is valued.