There are parts of Australia where the sort of childhood you had are still available, Mise - one of my expat friends lived in one such place, but it's "country" NSW. Small town where there are probably only 50 kids in the school altogether.
I live in a large NSW town, where driving everywhere is de rigueur (Like most places in Australia, IME so far!). I also live on a very busy main road, and we're on the wrong side of the road for school/ shops etc., so it's not the sort of road I want to train DS1 on for road-crossing purposes. We have walked to school but DS1, at 9, is not old enough to go by himself yet because he is a day dreamer and because he has to cross too many roads to get there.
Because of the hideousness of the first main road, he has to walk down to the lights to cross that road. That then gives him another 2 roads to cross that he wouldn't have otherwise needed to, and the crossings are not good ones, plus it adds 10 minutes on to the walk (not that big a deal but annoying).
The school have gone towards the over-protective side, yes - partly because of the number of kids who either get hit by cars or have near-misses outside the school! The last one (a near miss) caused the Principal to set up a new school-leaving system: all walkers, or those being picked up at the kiss-and-ride area, have to leave by one gate only, which is also the one by the designated crossing, now "policed" by a teacher. Bus kids leave by another gate, straight to the buses. It has worked, in that there have been no new incidents this year - but God it's a pain, especially if you park the other end of the school to collect your child.
Anyway that was a long ramble, not entirely to the purpose!
DSs are both allowed to play in the back garden by themselves, but we don't live in walking distance of any of their friends, so they get driven most places and don't play out on our back lane (I've already mentioned this in a previous post).