Having played "OldTime" and "String Band" music for the past 40 years, the two main differences I find in the music are 1) The lead instrument. In Old Time music, the fiddle more often takes the lead. In Bluegrass, you see a greater import of the banjo, and particularly the banjo style. Old_time banjo uses a style called "clawhammer" or "frailing", which a more rythmic sound, with the melody woven into the chording rythm. Blueegrass banjo uses a three-finger style that includes a great deal of extra (bear in mind I'm an Old-Time player) notes and seemingly a lot more flash. Bluegrass fiddlers often tend to have a cleaner, more modern sound, and for the Bluegrass mandolin style, see Bill Monroe. 2) Lyrically, the Old-Time Music is much closer to the Scotch-Irish-English music that the people who settled the Appalachain and adjoining mountains brought with them in the 18/19th centuries. String Band music was a further refinement (?) of this, and usually in a somewhat more irreverent manner. Check out such tunes as "Bald-Headed End of The Broom" and "Sales Tax on the Women". Bluegrass music evolved out of the Old Time/ String Band music, and became more sentimental in it's lyrical development, and moved increasingly towards the popular taste. Good Bluegrass is a treat. But check out "Gid Tanner and the Skillet Lickers" and "The New Lost City Ramblers". These groups are not as slick as Bill Monroe or Flatt and Scruggs, but they are every bit as much fun. Particularly if the straight-and-narrow seems a bit confining!
I have several "normal" banjos, and have recently discovered the banjo uke. My no-name soprano banjo-uke seems to bring out the raucous element within me. It's a bit of a compression to frail a banjo uke, but it's fun and kinda PO's some of the normal uke playeres, LOL! Onwards and sideways!
Don
S.S. Stewart banjo-uke
un-named banjo uke, 5" pot (most raucous!)
un-named banjo-uke 8" pot
multiple Mostrom ukuleles (my builds)