Why is the Icelandic language more linguistically conservative than other Germanic languages?

Our guesses:

• Language change is quicker in places where there are a lot of people, lots of social difference, and a lot of traffic. Lots of people generate more random linguistic variation; lots of social difference generates more deliberate linguistic variation; lots of traffic helps idiosyncratic distinctions that one person comes up with propagate.
• Iceland had none of these. It is relatively isolated, small, and homogeneous.
• Iceland has had near universal literacy for a millennium. Literacy is known to be a powerfully conservative force in language change: it keeps centuries-old speech (and notions of speech) in circulation.
• Icelanders are prescriptive about keeping the language stable, so they collude with the conservative force of literacy. The most renowned instance of this among linguists is flamæli: Icelandic (language): What is flámæli? This is a vowel merger from the 1920s that Icelanders actually managed to not just stigmatise, but reverse (at least temporarily). There are cultural factors at play, but the small and homogeneous society also means that cultural conservatism has a much greater chance of success.