Yeah, you're broadly right - and this is still shitty anti-consumerist behavior.

In regards to a game behind tied to an account, I'm not sure about that, but I don't know enough to say for sure. Say I buy a game, install the game on my machine, then trade that disc to a friend. If Sony nukes my account, I think the game would still work for my friend. Or, if they revoke that one game's license, what if I had another copy of the game? It's possible to set up a PS5 without the Internet: wouldn't Sony then be stopped from knowing what you're doing/be able to revoke licenses?

You're right that physical media is still technically a license to use the item for personal use, that you don't actually own the work, and that conceivably it can be revoked by the company. However, having a physical piece of media allows you to play it offline, loan it to a friend, sell it on eBay, rent it from GameFly, and back it up digitally. Games can then be emulated and preserved for future generations.

Having choices matter: whether between Sony, Microsoft, Nintendo, or Valve, or having physical or digital media. When Microsoft is failing, Sony is less inclined to do right by gamers. If we lose physical games, it will be easier for games to be altered/removed/revoked at whim. Years ago there was a rash of TV episodes pulled from streaming due to various censorship reasons - but they still exist on DVD & BR for fans to enjoy. Movies that don't get released physically and aren't on streaming are functionally lost/dead.