yes,

in short, people/entities with websites employ bots to click and interact with the Google Ads on their website to generate fake ad revenue.

and the person running the ad campaign is billed for those fake interactions.

I'm guessing app ads are heavily botted because they're more costly vs. a simple ad that lands you on a website (edit: I was wrong, see reply by OP: https://news.ycombinator.com/item?id=49665323)

Nailed it. It's a microcosm of the entire economy. Success percolates to the least scrupulous, at the expense of everyone else.

That's it. The scammers display ads. Two scams: one is mostly or entirely artificial traffic; a second is eg low quality ad slots disguised as higher quality. For the latter, think ads in videos shown off screen with programmatic interaction to make it appear as if the legit traffic saw and interacted with the ads.