Do French people rarely use the "nous" verb form in speech, and use "on" instead?

Choice partly depends on sense. If "we" excludes "you," or in the phrase "chez nous," or in the accusative case (English "us") then "on" is hardly possible. The tendency to prefer the impersonal pronoun as somehow less emphatic and definite, and therefore politer is not exclusive to French. Portuguese uses "a gente" (corresponding historically to French "les gens") in exactly the same way, and even more readily, e.g. Quer vir com a gente? meaning Vous voulez nous accompagner? but this would be avoided in formal written Portuguese which would prefer Voc� quer vir conosco?, where conosco is a compound of com n�s ("with us")---just as "nous" is more frequent than "on" in formal French.