You got a socially isolated group of people speaking a Germanic dialect on the Rhine. Increase time, watch as linguistic innovations appear within the isolated dialect and mainstream dialects which are not exchanged between the two. Mutually intelligibility decreases, isolated dialect becomes marker of social group. Bam, new language.
...that's hideously simplified, but yes, isolation, whether geographic, social, or otherwise, tends to make dialects diverge.
Also, it's not a "hybrid" language; the language itself is fundamentally Germanic, although it does have Hebrew and Slavic loan words. Hebrew itself was long dead by the time of the diaspora, so Jews adapted the local languages; you see this in Persian, Greek, Iberian, Arabic, et cetera. But the social isolation in each of the communities caused the Jewish dialects to diverge from the mainstream ones and become separate languages.
So the reason you said before - the internal culture of the Jews - is precisely why Yiddish exists. They simply adapted the local languages first. Yiddish diverged from High German during the transition from Middle to New High German; at the beginning it was pretty much just Middle High German with Hebrew words included.
