The original newspapers -- sold at subscription only at six cents a piece -- were targeted at the elite, with news relating to politics and/or trade and shipping. Local news -- the more gossip-y type elements you ask about in the question -- was done by word of mouth.

In America, the rise of the "Penny Papers" in the 1830s also brought the rise of local journalism. Papers were now a penny and sold by newsboys on the street. News that used to require word of mouth now could be found in print. Public sales notices were replaced with ads.

This means your time period in the question is not really "at the start" of local journalism, but to focus on the early part of the 20th century I'll give detail from a guide to journalism published in 1911.

One thing to keep in mind is from the standpoint of a local in a small town of 1911 their world is, in a sense, small: the local connections and people are a vivid "world" of detail, where what might seem like trivial details to a modern reader resonate much stronger.

The purchase of an automobile by the average citizen of a large city where thousands of automobiles are owned, can scarcely be considered an item of news for the newspapers of that city. In the small town where probably only a few are owners of automobiles and where a large percent of the readers know the buyer and have a personal interest in him, it might properly be considered of interest or news.

Generally, a reporter at the time for a small paper (or even a large one) gathers information in "runs", visiting multiple locations regularly where they hope to get stories. The guide lists:

City Hall, Police Stations, Hotels, Undertakers, Justices' Courts, Post office, Union Station, Steamship Offices, Schools, Theaters, Municipal Courts, Fire Headquarters, Public Hospitals, County Jail, County Courts, Federal Courts, Civic Organizations, Political Headquarters, Coroner's Office, Clubs

Some places might be visited at intervals, some might be once or twice a day. There may be a pass-the-baton effect where one reporter knows a story will appear at a different "run" -- i.e. a fire might result in needing to report at an undertaker.

Remember that, without exception, almost, every person you find registered at a hotel can give you a story of some sort. Your first duty is to meet them and get them to talk. Then the news or stories will come.

The 1911 guide notes that women and children do read newspapers, justifying a stop in a reporter's run at schools; reports can attend board meetings, learn about new courses of study, and various prizes and honors obtained by students.

In addition to runs, there are assignments. These are given to reporters not on a run, although a reporter on a run might be diverted to an assignment. This is (in your small papers) where you might get reporting on parties. These can come from people who call in tips, or information gleaned from runs.

Especially valuable all this -- and perhaps the key thing you are missing in visualizing this historically, although this isn't outdated -- is a reporter's friend network. Stories, at the time, depended often on how many friends a reporter had. Friends know about events and can become, essentially "volunteer reporters" who pass on information.

What reporter, for example, has not felt the joy of finding a friend at the scene of some event or place where conditions are not favorable for his obtaining the facts?

The historian Jeff Hill has noted that historic local newspapers are not "passive reflectors" of local life; they actively create the meaning in it. It is not just reporting on the culture of the community, but creating it. Essentially it means: the odd celebrations, the minutiae of parties, are intended to create a pride of place; by putting things in print, they are no longer trivial, but celebrated. It is like zooming in from the facts of a giant world to facts of a small one, but fractally, the small world can create just as much detail and interest to those involved who live in it.

..

Hobbs, A. (2018). A Fleet Street in Every Town: The Provincial Press in England, 1855-1900. Open Book Publishers.

Kaniss, P. (1991). Making Local News. University of Chicago Press.

I'm a historian of Europe (and particularly, of Germany), not of American history; nonetheless, developments in the history of the newspaper and the mass media each follow a broadly similar historical path, though with some slight differences in timing.

The short and direct answer is that small-town newspapers in the 1920s had few reporters, and their reporters would go visiting official places (police stations, government offices), but were rarely sent to the sorts of functions you describe, because the small-town newspaper office had very few reporter (sometimes only 1). So the vast majority of "news" that you mention (bridal showers, children's parties) were indeed self-reported to the newspaper, which was under (constant) deadline and always looking to fill the page.

As background:

Newspapers as we would recognize them really first took off in the 1700s (earlier in Germany) By the late 1700s, every town—even the ridiculously far-away villages in the Americas—would have some sort of printing press that churned out newspapers, and hence, "news." (The singular term, "THE press," reveals the historical fact that most towns had only one printing press, as they were expensive, and it was a mark of a certain status, size, and wealth when a town got its own press, and no longer read the newspaper printed by the press of a larger neighboring town.) A very small town would have a cheaper hand-press, and only one main employee (the owner/editor/reporter), and it would appear weekly. Larger towns had larger middle-classes, who could pay for the paper, and thus appear daily, and larger staffs, with an owner, editor, perhaps a writer/reporter, printer, and delivery boy(s) all as staff.

The newspaper office emerged as the social focal point of the town. Not only did you read its daily or weekly missives (if you were "informed", i.e. could read and were elite enough to pay for the paper); but if you were too poor to pay for the paper, you could go to the press office itself, where they would have hung out a copy of the newspaper, and read it there. (or hear someone else read it out to you, if you were illiterate.) But this also meant that the press—i.e. the newspaper office itself—was the very first place to go if you had any "news." i.e. if there was a story you learned about, or had juicy gossip or had heard rumors, or you'd just returned from a sea voyage with the latest developments in London or Paris, or if you were trying to start a business and get customers. Commerce, by the way, was always close to the heartbeat of "the press"… it was the commercial middle-classes who had started the whole thing (with their price-lists) and who were its main customers (as subscribers) and also, through their trade connections, the main suppliers of "news" to the press.

In the 19th century, everything changed. Printing presses became much more advanced (with the rotation press for big entities, then the twin-rotation press by the late 19th c.), and just as importantly, paper became cheaper (switching from rag-stock to wood pulp). Transportation networks (especially by rail after the 1840s) expanded, allowing for "news" (i.e. reports of happenings) to travel quickly, but also for newspapers themselves to reach far beyond a town's narrow (foot- or horse-reached) radius. All of these factors--faster presses, cheaper paper, better transportation--allowed newspapers to be cheaper, and travel further, which increased the subscriber base…often reaching into the lower reaches of the middle-class, such as tradesmen, for the first time.

And, of utmost importance to this was the boom in advertising. Classified advertising (at the end of the paper, appended in an ad-hoc fashion) was joined by in-page advertising (placed among the news columns using more sophisticated typesetting), and together, these advertisements changed the business model entirely: advertising soon eclipsed subscription as the primary generator of revenue. Newspapers could expand dramatically, and now afford new technologies (presses, autotypes) and print more copies, reaching more people—all supported by advertising. Moreover, this new business model meant that if you wanted to expand your business, you had to advertise in the local/regional paper… because your competitors surely would.

Finally, by 1900, the larger city newspapers (which in the previous century had still been a fairly artisanal effort, and bore the imprint of its owner/editor) could become a truly mass-media entity, with a large professional staff, including multiple reporters. Big city papers began to have newsrooms. Reading audiences by 1900 were also, for the first time, popular audiences. Indeed, certain newspapers emerged that catered to the "masses" by being cheaper, easier to read, and with more illustrations. (This era is the birth of popular, sensationalist and 'yellow' journalism, but that's a digression. It is also the birth of "neutral" reporting, designed to appeal to the widest possible audience, to maximize sales and subscriptions.)

But for the small town papers circa 1900, you didn't need a newsroom. (nor could your advertising + subscription model afford one.) So, emerging along with the telegraph was the development of the news wire services (Associated Press, Reuters, Wolff Telegraph Bureau) which privatized (and professionalized) the "newsroom": they had newsrooms in all major cities, which compiled news from that city, and sent it across "the wire"… and for a small subscription price, every small, rinky-dink press in every small town in Europe or the Americas could choose which national and even international stories that came "off the wire" they would print. Wire-stories were often written by the agencies to be as "neutral" as possible (though reflecting the class- and political prejudices of the wire-room reporters, of course), and every city, regional, and local newspaper would then add its own "take"—its political gloss, if you will—to the wire story.

All newspapers also filled out their wire service with other news. This could be local news, that may (or may not) have been gleaned by a reporter. Remember how I said that newspaper offices of the 1700s had become social centers? Well, they remained so by 1900… in the aggregate, of course, with many cities and even larger towns having more than one newspaper. If you—as the leader of a political organization, or the press liaison of a state office, or the head of a volunteer organization, or a businessman who had a strong opinion about a local issue, or a chamber of commerce representing such businessmen, the FIRST place you would send your petition, newsletter, organizational broadside, meeting notes, or self-crafted missive was "the press"—i.e. the local newspaper offices.

This, by the way, is where many, many, many historians go HORRIBLY WRONG in their use of newspapers as primary sources. Very, very few newspapers in the era 1900 to 1920 had large staffs of reporters. The VAST majority of news printed was either from the wire, or a rehashing of organizational missives sent to the papers by some sort of institution or organization… bolstered by the local items you mentioned in your post.

Many historians fail to realize that "their" newspaper is not printing a story of an event (i.e. fact) or even local interpretation of an event, but rather, offering a local gloss on a centrally-produced interpretation of an event. Not just wire-service stories… those are usually easy to spot, as about half the time, the press will say "the Associated Press reports" or "Wolff Telegraph Bureau" reports… But so, so many of the middling "stories" in the regional and local press—which still had tiny staffs, with few reporters—are re-workings of "news" handed to them by organizations, groups, chambers-of-commerce, volunteer societies, or whatnot. Very, very, very few stories in a newspaper printed from 1850 through, say, the 1930s, were actually generated by the newspaper staff itself.

[Note to historians: you CANNOT take news stories in local or regional papers as reflecting actually-seen events, or even as "evidence" of a pervasive mindset! The vast majority of reports circa 1900 are artifacts of organizational life. A newspaper circa 1900 is much more akin to a well-curated website today than to a newspaper of the 1970s that had a full newsroom and professional staff. end rant]

Would anyone know of any online resources that compile early newspapers? So one could take a look at headlines from the late 1800s/early 1900s, for example?