El Salvador's government leaders today heaped praise on President Reagan's address to Congress last night on Central American policy. For the first time, said President Alvaro Magana, there is a "true and objective" picture of the conflict here.

Accompanying the praise was the clear hope that Congress would approve all the aid Reagan has requested for this region, money described by the government here as "urgent help for western democracy."

The rebel front's Radio Venceremos, however, dismissed Reagan's speech as merely another reflection of the administration's "worry and desperation" about the region.

U.S. Ambassador Deane R. Hinton, picking up the tough tone of Reagan's address, called on the guerrillas to "put up or shut up" on the question of public support they enjoy and to join in the electoral process.

In a speech delivered to a group of businessmen tonight, Hinton described military assistance as something needed here "to strengthen the shield behind which political freedom, economic progress and social justice can be furthered in El Salvador and throughout Central America."

The ambassador dismissed the guerrillas' offer, made in December, of "dialogue without conditions" as an empty gesture.

For the Salvadoran government to negotiate the makeup of its administration with the insurgents before elections scheduled at the end of the year would be "illegitimate," Hinton said. "That is not dialogue, that is negotiated power-sharing. It is undemocratic; worse, it is anti-democratic. Neither your government nor mine would support such talks," Hinton told the businessmen.

The ambassador called on the guerrillas to "tell the world what would be required to get you to the ballot box. I say to the Farabundo Marti National Liberation Front , I say to the Revolutionary Democratic Front , you've got your chance--do something with it. Put up or shut up."

Apart from the public pronouncements, there was little that military observers could point to showing any major shift favoring the U.S.-backed government in the war here.

The change in defense ministers earlier this month was widely expected to bring sweeping changes in what critics often have described as an incompetent high command. But at a press conference with Magana and other leaders today, the new minister, Gen. Carlos Eugenio Vides Casanova, said he would wait for an "oppportune moment" to change his subordinates. He said the moment would not come this month.

Most of the reaction here was to Reagan's style. Constituent Assembly President Roberto D'Aubuisson, who in the past was often alleged to be involved with death squads, called Reagan's message "valiant and patriotic."

Reagan's charges of Nicaraguan, Cuban and Soviet designs in the region were lauded by Vides Casanova as an antidote to what he called "disinformation" that depicts his Army as being riddled with incompetents, fighting against the Salvadoran people, violating human rights, massacring innocents and defending the interests of the old economic oligarchy.

Vides Casanova noted that "the smallest country" in Latin America is the one "putting the greatest effort into fighting for democracy."

Meanwhile "the whole country is a battleground," one well-informed military analyst said this morning. "The guerrillas have begun to take their operations into areas that have hitherto been quiet." The analyst called this new fighting in such areas as Santa Ana province "war on the cheap," because the insurgents can make a major impact with a relatively small number of troops.

Military sources said that in northern areas of the country, stretching from parts of Metapan and Chalatenago provinces in the west to northern La Union in the east, the guerrillas often are seen to operate with increasing impunity.

Yesterday afternoon, for instance, the last 30 miles of the main highway running from the capital north to the Honduran border were the scene of frequent guerrilla checkpoints and no government military presence at all.

The Army has launched "cleanup operations" in contested areas around the Guazapa volcano and the Serron Grande dam and in parts of Morazan province. But there is no indication these will be substantially different from other operations, where the guerrillas were "cleaned out" only until the Army left.

News services reported reaction elsewhere to the speech:

Nicaragua's leftist government called for armed protest marches throughout the country in response to Reagan's appeal for more military aid for Central American anti-leftists.

About 50,000 Nicaraguans rallied in downtown Managua, mostly protesting U.S. support for insurgents seeking to topple the Sandinistas.

"Power to the people," chanted the demonstrators, including about 500 soldiers who waved their rifles in the air. "They won't get in," the soldiers shouted, vowing to stop insurgents from entering Nicaragua.

Radio broadcasts by a Nicaraguan government representative said Reagan's address slandered Nicaragua. The broadcasts demanded that the people take to the streets "carrying your rifles, machetes, clubs and any other weapon to show the ability of the Nicaraguan people to defend themselves against aggressions planned by Mr. Reagan."

The official Cuban daily Granma printed its Thursday edition late in order to include the text of Reagan's speech but made no comment on it. Havana Radio later said the speech was "full of cliches of the ultra-right and an echo of the darker period of McCarthyism and Cold War."

Brazil's president, Gen. Joao Figueiredo, speaking on Wednesday before Reagan's talk, attacked U.S. policy in Central America and said Washington had indirectly driven Nicaragua to align itself with the Soviet camp. Brazil has rarely criticized U.S. regional policy in public.

The Brazilian president, speaking at a conference in Cancun, Mexico, told reporters U.S. policy in Central America undermined the region's right to self-determination. The United States was partly to blame for Nicaragua's swing toward the Soviet Bloc, Figueiredo added. "If Nicaragua had received economic aid from rich countries, especially the United States, then it would not be in the current situation."

Honduras welcomed the Reagan speech, the government of President Roberto Suazo Cordova saying it supported fully Reagan's opposition to "totalitarian expansion" in the region.

The Soviet Union accused Reagan of distorting the aims of the Central American "liberation movement" and said that increased aid to El Salvador would make a new Vietnam out of the region.