More expensive American made Strat models will be made out of one piece bodies with less imperfections. The wood will be quality top knotch always. At most, you'll have a few joins under paint, but the joins will be perfect, and the wood will be perfect.
On squires, the frets are smaller, inlays and dots are made from different materials to save costs, routs under the pickguard will be different; single routing technique to accomodate several pickup styles can cut costs. Multiple routing shapes on different guitars will drive up costs, as someone needs to write the CNC program.
Finishes are supposidly different too. I'm not sure if they still do nitro finishes on newer fender usa strats. I know the Squires are all some sort of thick poly though.
Squires are going to have cheaper hardware which lasts less time, and overall, the instrument will need more repairs and adjustments in the future than a well made instrument.
In short, squires are generic bodies slapped together with whatever cheap materials are available, and USA fenders have a lot more time put into QC, and more time put into design as far as routs go.