Despite its flashy image, Hollywood has fairly prudish roots. In 1877, a group of temperance advocates trying to escape the evils of downtown Los Angeles moved to the area and started a colony. Their haven became a town in 1903, but in 1910, Hollywood's own voted to join Los Angeles to gain access to the water supply.
The next year, the Nestor Company built the first movie studio in Hollywood. Within three years, much of the fledgling movie industry moved from the East Coast, drawn by the perfect climate, variety of shooting locations, and freedom from patent laws.
The new industry exploded with would-be actors, writers, directors, technicians and entrepreneurs heading into the area. Soon newcomers outnumbered the original inhabitants, no doubt shocking them with their "intemperate" lifestyles.
In the 1960s, as the big movie companies moved to the more spacious San Fernando Valley, Hollywood fell on hard times, and the buzzword became seediness rather than success. Urban renewal projects have helped, but you still have to look past some nitty-gritty realities to see the magic.