Quality difference between Mexican & American Fender Fat (HSS) Stratocaster?

I went to the music store today to take an HSS Strat for a spin. They had American Strats for $1100 and up, but the Mexican Fat Strat they said they had a few days ago suddenly wasn't there. They said that there is a huge quality difference between Mex & American Strats, different woods pickups electronics etc. I thought the main diff was that one was made in Mexico and the other the U.S.? Is the quality difference that significant? I would never get a Squire, heard too many negative things. Looking to spend about $500 or so for a decent guitar. Thanks for any advice.