In Holland you can fly VFR with an FAA License if you are not a Dutch National and stay in Dutch airspace.
Does "national" mean citizenship? What if you have a Dutch passport and also say a Polish passport? If you give up your Dutch passport, there is (under the EU setup) no practical difference in the way you live, pay tax, etc.
I believe ICAO does allow a State to prevent its own "nationals" from exercising the privileges of a foreign license. I have no idea if this has to be universal (for that State) or if the national CAA can use it to ban specific individuals from flying on e.g. FAA licenses.
it seems that anybody from Europe getting a FAA PPL really has to have access to a N reg aircraft
Yes that's true. Most people doing FAA PPLs are working towards the FAA IR and then you are looking at participating in this activity at a significant level of budget, and then it all makes sense. But for VFR-only messing about, no.