It’s more like emacs-flavored RPC. You can edit files on remote hosts using TRAMP, and you can transparently execute processes on the remote host. If you’re editing a remote file and invoke, say, a compiler it will transparently run the compiler on the remote host against the remote file.
Similar, yes. It supports many more protocols than SSH though[0]. It also supports multi-hops, even across multiple protocols if it can[1]. So you could say: access a remote server over SSH, and then pivot to a Windows machine behind a firewall using Samba, all by simply specifying a file path to do that.
TRAMP is general access via ssh, e.g. you can also use it for executing binaries on the remote machine. In the case of remote files it does something like `base64 -D <(ssh remote base64 remote-file) > tempfile` for read and the inverse for write.