Are there distinctive traits (melodies, scales, chord progressions, rhythm, techniques) that set the genre of folk music apart?
"Folk music" is not a genre. "Folk music" is many hundreds of different genres.
There are three broad categories of music, "classical", "folk", and "commercial".
Folk music is simply whatever music that is made by people as a part of their culture, casually, and with no real expectation of earning money from it.
Folk music depends upon the culture from which it derives. When people talk about the folk music of the USA, they are usually talking about music from rural communities in the Appalachian Mountains composed of the descendants of immigrants from Ireland, Scotland, and England, and reflecting the musical traditions from those nations that the first immigrants brought with them.
This is ultimately the particular tradition that Bob Dylan drew upon, despite the fact that Dylan is a Jew from the Midwest. However, Bob Dylan does not represent real folk music. When a musician becomes part of the major label record business, and their music is recorded and sold and marketed for profit, it changes. It becomes less folk music and more and more commercial music.
There are many different kinds of folk music in the USA that have little to do with the kind I've previously mentioned. When you talk about folk music from the upper Midwest of the USA, you are talking about polka music inspired by the descendants of immigrants from places like Poland and Scandinavia. When you talk about folk music from New York City, in its form around the year 1900, you are talking about klezmer and Yiddish theater music inspired by the descendants of Jewish immigrants from Eastern Europe and Russia and the nations around it. Folk music in Louisiana (exclusive of the city of New Orleans) is influenced by the Cajun people, who are remotely descended from immigrants from France. Then of course there is African-American folk music, such as the blues, which is influenced by descendants of the slaves brought from West Africa to the USA. And so forth.
All of these different kinds of USA folk music have their own characteristic instrumentation, melodies, phrases, time signatures, tempos, different languages for the lyrics, and different kinds of traditional subjects for the lyrics.
There is only one kind of folk music in the USA that does not come from an earlier musical tradition from somewhere else, and that is Native American music.
Bob Dylan is one thing; if you want to identify what characterizes other kinds of "folk music" you need to start by being much more specific about the particular culture you are examining.
First off, let's narrow things down a bit here. It sounds like you're talking about American folk music rather than folk music as a whole. Other folk musics would take a book to explain.
American folk music has the following characteristics:
There is an very wide range of folk music technique but for guitar this includes:
From an English perspective, 'folk music' has just as much variation as previously stated, but the main sub-genres seen are traditional folk and the American folk described above. I'll leave the American stuff to these guys who have summed it up quite nicely, but the traditional music can be categorised by a few factors.
The main thing about this style of music is that it is designed to be accessible. It thrives and gains exposure through the live music scene, with folk clubs generally being held in pubs. All clubs invite anyone with an instrument to come and join in and the music accommodates this.
I tend to find that anything that has a chord progression in the key of G with 4/4 time, and hammer=ons in the base notes will sound very good and folky. Also as a little tip when you are moving to a g chord on the a string try sliding from the 1st fret to the 2nd fret where it is supposed to be for a G chord. Happy hunting for your sound.