Not really a clear understanding of how it works. Folders are based on the directory structure on your computer when you copy a file into a folder the operating system looks for free space to save that file to and creates an entry in the FAT, (file allocation table), that is a pointer to the location where the file is stored. When you import into LR if you use the “add” option it creates an entry in the LR catalog with a pointer to that location. If you “copy” or “move” when you import it puts the file in whatever folder you specify and adds an entry to the catalog. You’re right that that file remains untouched. All of the edits are also saved to the catalog and when you pull up an image LR applies those edits so you see the edited image. If you opened that image in another photo viewer you wouldn’t see the edits. Collections are NOT virtual copies. They are simply pointers to the same image file in the folder. Collections simply allow different virtual groupings of images. Whether I open an image from the folder or collection it is opening the exact same image with the exact same edits. If you edit an image in a collection then those same edits will apply if you open the image from a folder. Now one thing you can do in LR is create a virtual copy. All the virtual copy does is add an entry to the catalog that points at the same image file but it also creates a separate copy of the edits for the new entry so you can make different editing choices. It’s a great feature because it allows you to try different editing choices without affecting your previous edits.

Not quite correct.

Shortcuts (look on your desktop) are pointers to file locations, sometimes with additional instructions or "arguments". They have been around since the beginning of as DOS (Disk Operating System). Disk operating systems have been in use as long as files have been stored on disks or other internal memory.

A collection is just a table of shortcuts.

When I started using computers, information was stored on cards as well as paper and magnetic disks or tape. That was cumbersome, inefficient and risky.

The File Allocation Table (FAT) originated with IBM (not Microsoft), to point to the location of the file and to manage all of the segments of a fragmented file. That's what gets fixed when you defragment your file to try and put everything back together in single continuous fragment.