Perhaps because the Spanish settlement of the region was slow and not real aggressive, the Guarani and Spanish settlers got along relatively well and as these people intermarried a new culture and lifestyle was formed. In some ways the Guarani dominated, such as in foods and many lifestyle elements, but the Spanish culture dominated in terms of language and religion.
Over time Spanish influence ebbed and flowed as the country experienced strong Spanish rule followed by complete independence. No matter the ruler, the culture and lifestyle seemed to thrive, either in contradiction to the Spanish or in unison with the independence movements. This gave the country a very strong identity, culture, and lifestyle that still exists today to a great degree.
Today the culture and lifestyle of Paraguay continues as pride in their Guarani heritage is creating a revival of historic Guarani foods, clothing, and even their language. While the lifestyle today is quite modern and more heavily influenced by Europe and recent technology, the culture is returning to its roots as being Paraguayan essentially also means being Guarani.