The size of the internal wire, solder connection, strain relief, and especially the cable shield size are all factors.
The shield is most critical if you look at the length of wire an miniscule power of any instrument without a powered preamp. Even with a built in preamp the output impedance will be high from most circuits.
Think of it this way, high impedance is another way of saying there is a voltage signal but not much current is able to flow to or from the device. If you try to pull or push too much current the signal will disappear. When there is not much current flowing, the signal is much more susceptible to other signals and noise crossing the wire.
Most 3.5mm audio connectors have poor shielding, strain relief, and the actual connection points where the wires are soldered are terrible. With the way they are constructed, the solder connection must be done very quickly to avoid damaging the thin plastic insulation between the rings that make up the tip terminal. With the larger quarter inch connector, there is a lot more heat mass in the actual terminals and there is enough room to make solder terminals with heat isolation. This helps to match the terminal with a larger wire gage so that both surfaces can evenly wet with solder with a properly set iron temperature. In theory this leads to a far more robust connection.
Most 3.5mm cables are unshielded. This is fine for the low impedance (high current flow) of an amplifier output stage, but it is totally insufficient for the high impedance input of an instrument.
This is why instrument cables generally cost so much more too. You're buying more copper, an engineered cable that has more that just wires in an extruded plastic sleeve, and the connectors are special purpose, beefier, and more engineered for a specialty task.
Because 3.5mm jacks suck. 6.3mm jacks are much more sturdy and can be easily mounted on 6mm or even thicker cable, which can also handle much more use.
Flimsy jack and thin cheap cable cable is asking for trouble during performance.
The only plus of 3.5mm and smaller 'phone jacks' is their size and in many applications it is much less important than reliability.
The 1/4" jacks became standard before metric ruled the world. Besides, 1/4" jacks are way sturdier than 3.5mm posts. Now if the metric guys came up with a 7.0mm jack - we can talk transition.
honestly, i had completely forgotten that some phones, for some completely unfathomable reason, lack an audio jack of any kind. if you are suffering through that, you have my condolences.
Would be better with XLR, but anyway, the jack is the standard that was used in the very first electric guitars.
I'm not sure why they chose that one at the time, but it was the same kind of connection used in telephone boards, so it was already a standard for audio long before the invention of electric guitars. The jack was invited in 1877. Makes sense to use something that already existed and had proven to be reliable and available.
The reason they're still used is for backward compatibility. Other cabled instruments and microphones have changed standards through the years, but because guitars need to be paired with all kinds of amplifiers and stomp boxes from various manufacturers from different decades, it's impossible for one brand to change the standard.
A curious fact is that the 1/4 jack is the longest running connection standard.
With many professionals using wireless cables these days, it could more easily be changed, but at the same time, since going without a cable also removes many of the issues with the jack, there's really no need to change it.