Background noise is the motors for the tone generator, probably the cable compressor too. The louder noises are the call routing and reset. Background noise would normally be a fair bit louder - I'm guessing he had mic right up against the rack for this.
Or a town exchange: https://youtu.be/xUOh9fCSgqw
Towns had much larger exchanges, and they were loud. Probably enough to have hearing loss if you worked there. Only visited one once, decades ago.
Also had a distinctive smell - machine oil, burnt electrics (50v), solvents. Lovely.
But yeah, as mentioned, a building with decent insulation can contain the noise. A flimsy cottage, probably not.
I think somewhere on textfiles.com there's a file by possibly kelticphr0st about those buildings.