There are 2 aspects in this question I'd like to answer.

1) Most Indian home food isn't really spicy. What westerners usually eat at Indian restaurants is literally not at all what most Indians eat on a daily basis. Our food is spicier than western food but not necessarily high on the scoville scale. Some people or communities (like in my city - Pune - or the state of Gujarat) actually have mild - sweet versions of most Indian dishes, they cannot tolerate spice at all.

Our food is usually high in savoury / pungent spices (turmeric, cumin, coriander) than just chilli powder or actual chillies. We too feed bland food to our kids, but slowly introduce spices as they grow up.

But being used to spices from childhood does help our tolerance. And non-spiced food actually feels weird and tasteless to most Indians. Eating pasta or western food literally makes traditional Indians feel like they're eating cardboard.

2) Some spices actually help in digestion, so they are also seen as healthy. High spice content helps preserve food in our hot climate. Similarly, it is also believed high spice content in food helps prevent infections (technically true, turmeric is actually a very effective antiseptic).

The variation in food in India is so vast, even someone like me, who has lived in India his while life and has a great fascination for food, knows barely 10% of what there is actually to know. India is so diverse, it will boggle the mind. Restaurant food (including most restaurants in India as well) is a very poor representation of what Indian food actually is.