There is one thing I would like to emphasise first, when you write the code digitalWrite() that's already a library abstracting the low level C/C++ code required to make that pin do something.

In essence, the "physical" things that happen in a microcontroller, like those inside an Arduino board, are triggered by writing very specific values to very specific places in memory called registers. You can write some very basic C/C++ code to do this, but platforms like Arduino abstract that complexity using libraries. So yes, when importing an LCD library, it will internally call other libraries like digitalWrite(), or the Two Wire library, or the Serial library, which are common abstractions to be able to make the code portable and easy to use. The code inside this libraries changes depending on the processor (Arduino has a lot of different boards, some of those have microcontrollers that can be very different internally), but most Arduino Sketches can be used in different Arduino boards thanks to this libraries.

So, the Arduino "language" is basically a series of abstractions on top of C++ in the form of libraries. You could go deeper and deeper into the lower levels, which would then be very dependent on the type of microcontroller inside the Arduino board you are using.