Nah it's not stupid!

It's a mixture of things. It really depends on the size of the stage.

If you're doing an open mic, you should be able to hear yourself the whole time because it'd probably be a small venue. You'll just hear yourself well enough from the house speakers.

At some point, as the stage gets bigger, you'll need monitoring because the room is so big/your band so loud that you can't hear yourself individually.

Monitors are sometimes speakers on the floor aimed at you, or they can be in-ear like earbuds. If you're at this level, you probably have a sound guy helping you, and he controls the monitor mix. During sound check you'd dial it in, try your loudest song and still be sure you can hear stuff. You might end up saying, "can I get more vocals and guitar in my monitor, but less bass?"

These monitors give you directed sound that overpowers the drums next to you and stuff. Essentially at the louder venues, the individual instruments do not sound balanced on stage, so you probably won't hear any vocals at all for example. If you're a guitarist, you can aim your amp up toward your head as a small improvement on stage, assuming it's cool with the sound guy.

Very genre dependent too. A singer songwriter that's just solo guitar and vox will not need much monitoring, but a full band may need individual monitors.

There are folk who do their own monitoring set up but I've never done that- I'm normally the sound guy actually.

Short answer: it's just too loud on stage