/r/linguistics is probably the better sub for this, but I can answer for you anyway.

First of all, an important distinction must be made here between what is known as Swiss Standard German and Schwiitzertüütsch. The former is very much like the High German that is officially used in Germany, albeit with a few lexical differences (eg. Swiss Velo instead of German Fahrrad), and acts as the written form of the language. It is also used in official settings such as in government or in TV news bulletins, or when speaking to someone who isn't from Switzerland. Schwiitzertüütsch on the other hand is a collection of Alemannic dialects of German that are very different from either High German or Swiss Standard German, and that are spoken in more informal settings. This is the Swiss German that you were talking about in your preamble.

Linguistically, a similar distinction could be made between Swiss French, which is equivalent to Swiss Standard German, and Arpitan, which would be the analogue of Schwitzertüütsch. The main difference is, however, that Schwitzertüütsch is the common language among Swiss Germans, whereas Arpitan is almost extinct. Why Schwiitzerüütsch has thrived while Arpitan has declined is, however, not a question I am able to answer. The French government is notoriously hostile to regional dialects and languages, leading to their almost complete demise, but I'm not sure if this is the case in Switzerland as well.