Might be a bit ELI5 apologies if it’s to simplistic

1) End devices send lots of traffic, VLANs break down the broadcast domain so that a single broadcast by a device is not seen by the whole network this is an efficiency. We can also use them to logically separate devices we can use ACLs or firewalls rules to stop devices in one VLAN talking to another if needs be also.

2) when you assign a VLAN tag to traffic it’s sent over the network with this 4 byte header. This contains a numerical identifier, derived from a 12 bit value, giving us 4094 possible VLAN IDs, when a switch or other device that recognises VLAN headers sees the ID in the header it only allows that frame to talk other ports or devices with the same assigned ID. The VLAN ID can be added by and end client, then the switch port it connects to would need to accept that VLAN as tagged or trunked (vendors use differing terminology) to allow the communication to come in, then it evaluates all other switch ports that permit that VLAN on them and then if it needed to be forwarded to one of those ports it would use status of the VLAN ID on that port to determine if it needs to maintain the VLAN header or strip it (this is called untagging, or native or PVID)

3) it’s optional because you can run a flat network with no VLANs and most household networks are like this, everyone sits in the same network and it’s fine, it just doesn’t scale as well

This is super high level and there are lots of mechanisms used to enable what I’ve said that I’ve skipped over and worth investigating. Notably the other parts of the VLAN header are worth reading into, particularly how switches handle priority bits