Imagine you want to draw a picture of the playground at your school. You only have 8 colors of crayons, so no matter how well you can draw, your picture is not going to be photorealistic. But that doesn't matter to you because you can clearly see the swingset here, the slide there, the sandbox in the corner, etc. 8 colors is enough for you to be able to recognize it as your playground.

Annie is a spoiled rich kid who gets those ridiculous giant crayon boxes with like 200 different colors. If she wanted to draw your playground, she could shade in shadows, get the shade of red just right on the monkey bars, etc. So Annie could draw a much better picture with the same level of drawing skill because she just has more colors of crayons.

The teacher needs to make sure that everyone has crayons for a school assignment. Because the teacher is paid like a teacher, he can only afford 100 crayons. Since he needs to provide for 25 students, he can only give 4 crayons to each one. And for some reason, students can't share crayons because .... look, this analogy isn't perfect, just go with it.

Telephone companies can only process so many calls at once. To avoid overloading their systems, they try to remove as much audio data as they can without making the other person's voice unintelligible. A common way to do this is to remove the highest and lowest pitched sounds. Instead of transmitting all the frequencies that humans can hear, they chop off the ends of the spectrum so that they only keep the frequencies most common in voices. But music often uses a wider range of frequencies than voices, so it sounds weird when the phone company chops off some of the frequencies. Audio that is not aggressively compressed gives a better sound over the full range of frequencies that humans can hear. And people who want to spend wayyyyy too much money can get audio equipment that is even better.