The holes are a by-product of bacterium consuming lactic acid in milk. The Swiss cheese bacterium, propionibacterium shermanii, consumes the lactic acid in the milk and gives off carbon dioxide which forms the "eyes. " It also converts it to acetate and propionic acid - which gives Swiss cheese its distinctive taste.
Swiss cheese's "eyes" are one factor used to grade it for quality in Switzerland. I imagine that larger eyes indicates a more advanced fermentation and more taste. I don't see that it would have anything to do with dryness though.
You are absolutely right. In general, the larger the eyes in a Swiss cheese, the more pronounced its flavor because a longer fermentation period gives the bacteria more time to act.
I think the hole is the air space made from the bubbles. I would say holes have nothing to do with the taste of the cheese.
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