Tzintzingareo, Michoacan. And that is definitely true. Look at the Mexican president, for example, who looks like a Spaniard. He represents the 1% (probably more, though it feels like the correct statistic) of Mexicans that look like that. Also, the discrimination de juro isn't really an issue, but the de facto discrimination has more to do with socio-economic class than anything new else.
Notice how I did not say "majority" or "most," I chose "a lot" very carefully because I am an indigenous Mexican and I know about the communities of indigenous pueblitos that cooperate with each other throughout Mexico.
Have you been to any of the countless pueblitos in Mexico that most people aren't even aware of? Those people are proud indigenous people who have adopted the Mexican name and culture.
A lot of Mexicans are actually descendants of only indigenous peoples, though I do know about the mestizos (mixed people). This girl looks like she's got mostly native blood running through her, and I'm going to guess Mayan since she's kinda short. Source: I'm an Aztec Mexican