NEWPORT, R.I., July 21 - After 10 years of Newport Folk Festivals, the natural or "human" quality in the presentation of the music seems to have risen to a dominant position over the big-name or show-business approach. The festival last weekend offered several currently popular performers - Johnny Cash on Thursday evening, Muddy Waters on Friday, Joni Mitchell and Arlo Guthrie on Saturday. But none of them can be characterized as a superstar, such as Janis Joplin, who during a peak period of curiosity about her new career away from Big Brother and the Holding Company brought $61,000 to the box office in a single evening last year, a record for the Newport Festival.

The necessity to book names that will attract large audiences as against musicians who are closer to the folk tradition and create a more intimate relationship between performer and audience has been point of discussion for several years among the members of the Newport Folk Foundation, which supervises the festival. The absence of big names last weekend and the response to relatively unknown performers has convinced many members of the foundation that a corner has been turned.

Ralph Rinzler of the Smithsonian Institution, a member of the foundation, was particularly impressed by the reception given to the Old Timers, three elderly country musicians, by an audience of 7,000 that had come primarily to hear Johnny Cash on Thursday night.

"They were playing a raw form of music," Mr. Rinzler pointed out, "but that big audience opened up to them."

Similarly, the B. C. Harmonizers, a Gospel group from Rochester, captivated 16,000 on Saturday, when Arlo Guthrie, Joni Mitchell and the Everly Brothers were the best-known attractions. The fact that an audience of this size which just missed filling the 18,000-seat field to capacity, can be attracted without the resort to "hot" names is encouraging to the foundation.

"We found that big names bring people who cause big trouble," said the folk singer Oscar Brand, also a member of the foundation. "It's not worth it."

THE enthusiasm of a folk festival audience for lesser-known musicians was made strikingly evident yesterday afternoon when 2,500 people not only sat through a steady drizzle to hear a program devoted to young performers but gave an extended cheering, standing ovation to so genuinely folkish an artist as Frank Proffitt Jr., who played the dulcimer and sang gaily primitive mountain songs as "Ground Hog."

The audience was almost equally responsive to the contemporary songs of Happy and Artie Traum, the country blues of Steve Young, an English quintet, Pentangle, which drew on both folk sources and jazz, and the nearest thing to a celebrity on the program, Jerry Jeff Walker, who included his hit "Mr. Bojangles" in his lively, rhythmic presentation.

IF the argument over folk tradition versus big names seems to be reaching a resolution, another potential point of difference within the Newport Folk Foundation was raised by Pete Seeger when he and the singing crew of the Hudson River sloop Clearwater gave a free dockside concert from the deck of the ship on Saturday afternoon. Mr. Seeger and his colleagues plan to give similar free concerts on the Clearwater at towns up and down the Hudson River starting next month.

"These concerts are free," Mr. Seeger told the audience of 300 or 400 who stood and sat on the cement dock, "because the Folk Festival has priced itself right out of the American people."

He hastily qualified this by adding that the festival did have to charge something in order to be able to bring to its audiences a performer such as the African singer and guitarist Jean-Bosco Mwenda, whose trip to the festival this weekend cost $2,000, according to Mr. Seeger.

WHEN the accounts are balanced in a week or so, the festival is expected to show a loss. There was a big drop in attendance from last year's event - an estimated total of 51,000 this year against 73,000 last year when Janis Joplin proved to be an unusually popular attraction. But neither the smaller total audience nor the financial loss, if there was one, is considered to reflect on the Folk Festival itself. Part of the drop in attendance is believed to have been a reaction to the disturbances at the Jazz Festival two weeks ago. And if the festival goes into the red, a primary cause will be an unanticipated expense of $24,000 brought on by the problems raised by the Jazz Festival - $14,000 for the Folk Festival share of the cost of a new chain-link fence around Festival Field and $10,000 for extra police.

FOR the youngsters who came to the Folk Festival with nothing more than a sleeping bag or a blanket and the hope that something would turn up, the problem of finding a place to sleep was made more difficult last weekend when the city ordered all parks and beaches emptied and closed by midnight. This was a consequence of the disturbances at the Jazz Festival.

But another consequence of the Jazz Festival and of the hordes of footloose young people that it brought to Newport was the organization of a cooperative effort by five local churches and the Chaplain School at the Newport Naval Base. During the Folk Festival, the churches offered free sleeping space on their lawns and in their buildings, supervised by students from the Chaplain School. And a Providence underground newspaper, Extra!, helped out by distributing free fruit and fruit juice.