I don't think I've ever seen the film, but I know that it was Oscar-nominated for Best Picture. West wrote other books with the Quaker life as a theme, I believe.
No one really knows, but there are a number of theories. By the mid-Nineteenth Century it seems to have been assigned to residents of Indiana almost exclusively, but I was reading a book called 'A Texas Cow Boy' by Charles A. Siringo recently, published in 1885, and in it he refers at one point to somebody criticizing something he was wearing as making him "look like a Hoosier" - and in that context it seemed to mean a hick or yokel.