The distilled essence of Walter F. Mondale hit the campaign trail here today.

In as visually breathtaking a political event as his campaign has staged, in as firm a voice as the candidate has summoned in this long -- and long-shot -- quest for the presidency, Mondale laid out an eloquent argument for a government both activist and caring.

He did it by taking one of the speeches President Reagan most likes to quote -- the "City Upon a Hill" sermon that John Winthrop delivered to his fellow Puritans on board his flagship, the Arbella, in 1630 -- and turning it against him. Winthrop "said something else that Mr. Reagan has forgotten and that runs across his whole government, and it's the most fundamental issue at stake in this election," the Democratic presidential nominee told a rally in the Arcade, an elegant, 1890s' vintage, five-story, steel, stone and glass shopping plaza.

"Rev. Winthrop said to be a city on a hill, we must strengthen, defend, preserve and comfort one another. We must bear one another's burdens. We must look not on our own things, but also on the things of others. We must rejoice together, mourn together, labor and suffer together. We must be knit together by a bond of love. And so may it always be in America. Let's be a community, a family where we care for one another. Let us end this selfishness, this greed, this new championship of caring only for yourself. Let's pull America back together. Let's have new leadership. It's time for America to move on."

The crowd, hushed while Mondale spoke, broke into wild cheers beneath waving flags and a blizzard of balloons and confetti.

This is a campaign that is supposed to be on a death march, but the past two days have been more like a victory romp. Crowds are big, events have that special, presidential intensity, and the candidate is reaching back and yanking out all the bedrock values.

Mondale surely has no illusion about how long the odds and short the time. Yet these past two days he has been as stirring as he has been all fall.

Some suggest that he has been liberated by the certainty of defeat on Nov. 6. Perhaps he has decided it is time, as he himself has put it more than once this fall, "to lose a campaign about decency rather than win one about selfishness."

More likely, though, he still harbors hope. And he has calculated that his best chance here in the industrial heartland is to evoke the grand Democratic credo of caring for the young, the old, the sick, the poor.

During the primaries, Sen. Gary Hart (D-Colo.) was able to make Mondale seem hackneyed, out-of-date and captured by the special interests for hueing to that creed. Attacked from within his own party, Mondale had trouble articulating a response.

But now, running against Reagan, he is said to believe that the contrast is so stark, the values he stands for so ennobling, that he is making the case with verve. "We're down to the summary argument," said senior adviser John Reilly. "He's on a roll."

Speechwriter Marty Kaplan said Mondale ordered the Winthrop passage inserted into today's speech as the campaign plane was touching down here. "He's been very involved in shaping the message in these last days," Kaplan said. "He wants to talk about the most basic differences."

Mondale's other oratorial thrust today was to use a Reagan letter from 1960, in which Reagan compared the ideas of John F. Kennedy to those of Karl Marx and Adolf Hitler, to talk about differing views of the role of government.

"I thought Mr. Reagan would deny he wrote it," Mondale told the rally. "But yesterday he said it was a good letter. He said it was what he wanted to say, and that is that when government helps people, it moves us inevitably on a road to dictatorship.

"No wonder he fought Social Security and Medicare.

"I see Social Security as a commitment from one generation to the next. I see it as a principle of justice. I see it as dignity. I see it as something we do for our fathers and mothers . . . . He sees it as a step toward dictatorship."

The speech cast Reagan's alleged opposition to student loans, unemployment insurance and civil rights in the same light.

"The Kennedy letter is a cutting issue with a lot of blue-collar folks," said Ohio Gov. Richard F. Celeste. "It exposes Reagan's hypocrisy for trying to praise Democrats."

Celeste said Mondale, who has visited Ohio twice this week, is "within single digits" of Reagan in polls here, and that the state Democratic organization is geared up.

"Anybody who thinks that we've given up is reading the wrong obituary pages," Celeste said.

At a rally later in Toledo, Mondale assured voters that the race was tight.

"We have 11 days left," he said. "This election is close. They say it's over. They say the polls say it's over. They say it doesn't count what you think. I say they're making a big mistake. Polls don't vote; it's only the American people who do, and it's your choice."

Wednesday night, in a variation on that theme at a union hall in Cudahy, a Polish neighborhood south of Milwaukee, Mondale was introduced with this sentence: "The only polls he cares about are named Krajewski and Moduleski."

Mondale will have two main themes in the final campaign days before Nov. 6: the bedrock Democratic appeal, and the nuclear war and presidential leadership issue.

The latter will get more emphasis when he heads to the West Coast Friday for a three-day swing, but it has not been ignored here. In the last 24 hours, two of the politicians who introduced Mondale, Milwaukee Mayor Henry W. Maier and Sen. Howard M. Metzenbaum (D-Ohio), made specific, ominous references to Reagan's finger being on the nuclear button.

The crowd responses in the past two days have turned Mondale into a loose, even playful campaigner. At the Toledo airport, he was greeted by a girl who went silent when reporters asked her for a political comment.

"Just say how much you like the press," Mondale advised. The girl just laughed. "That's okay," Mondale joked. "She's too young to lie."