For example, if I don't set stretch parameters (tolerance, badness, emergencystretch, sloppy, etc) I get some overfull boxes (full LaTeX code post at the end).

Notice that TeX seems unwilling to hyphenate "dificultades", in spite of knowing perfectly how to do it (as shown in the last paragraph). It works well if I explicitly suggest the hypen (5th paragraph). Why?
Things get a little better tweaking the stretch parameters (eg, using \sloppy), but it still is reluctant to hyphenate that word.
And if I try \tolerance=10000 I get something quite ridiculous:

I cannot make sense of the layout of the first paragraphs - nor of the drastic change that happens in the third, just by adding a dot. Now, that's certainly not a hyphenation thing.
I know, that \tolerance=10000 is not advisable in general, but I understand that it basically means: "use as much blank space (glue) as you want, even if it looks bad, don't overfull never"; but surely there are lots of many more reasonable layouts than that.
Is there a simple explanation of why TeX uses this "strategy"?
\documentclass[a4paper, 11pt]{book}
\usepackage[spanish]{babel}
\usepackage[paperwidth=140mm, paperheight=210mm, top=21mm, left=14mm, right=10mm,textheight=173mm]{geometry}
%\tolerance=10000
\begin{document}
\begin{quotation}
Hola, llego desde muy lejos ---con grandes dificultades--- y le ruego quiera escucharme.
Hola,... llego desde muy lejos ---con grandes dificultades--- y le ruego quiera escucharme.
Hola,...... llego desde muy lejos ---con grandes dificultades--- y le ruego quiera escucharme.
Hola,....... llego desde muy lejos ---con grandes dificultades--- y le ruego quiera escucharme.
Hola, llego desde muy lejos ---con grandes dificulta\-des--- y le ruego quiera escucharme.
dificultades dificultades dificultades dificultades
dificultades ... dificultades dificultades dificultades
dificultades dificultades .. dificultades dificultades
dificultades dificultades...... dificultades dificultades
dificultades dificultades dificultades dificultades
\end{quotation}
\end{document}

---and\textemdashand ended going the simpler and for me elegant (at least legible) way: the Unicode emdash character – leonbloy May 08 '13 at 02:33