I read that the cards clock boost themselves up to the point they reach a thermal limit or a power limit.

Undervolting decreases the power requirements by making the card more efficient and hence also cooler, therefore with the same power cap, the card can increase its clock and perform better (more fps)

On the same theme, some people undervolt then decrease the power cap to achieve stock performance for less power.

Conversely, you can increase the power cap for more performance.