It was significant because that kind of old-fashioned musical comedy faded from view replaced by edgier fare in the 1970s...COPMAPY, CHICAGO, A CHORUS LINE and SWEENEY TODD.
It also marked Miss Merman's final Broadway show. After DOLLY she preferred the less strenuous concert performances where she could work when she felt like it and not have to be there 8 X a week for a year or more. (Did she miss any performances in DOLLY? She never missed CALL ME MADAM or AGYG or HAPPY HUNTING. She was out for a week in GYPSY but only because she had burst a blood vessel in her throat and needed time to heal.) She had spent 40 years - aside from a few trips to Hollywood - on Broadway.
So the closing of DOLLY was much more than the end of a long successful run. It was the end of an era.
Cast albums are NOT "soundtracks."
Live theatre does not use a "soundtrack." If it did, it wouldn't be live theatre!
I host a weekly one-hour radio program featuring cast album selections as well as songs by cabaret, jazz and theatre artists. The program, FRONT ROW CENTRE is heard Sundays 9 to 10 am and also Saturdays from 8 to 9 am (eastern times) on www.proudfm.com