file systems: does index.html contain all files?

I was very stumped on how a browser can run separate files together seeing how the front-end files of each website are scattered in different folders. I saw it under "sources" in Chrome developer tools.

But then I found a file called index.html and it was very big. Then I came up with the idea that it can run as a single file and it can contain all the files I saw in structured folders. I am doing that, but it is very long, even for small websites.

So does the index.html file contain all those small files or do you call them at some point? And does it run individually? I thought earlier that those subordinate files can be run in order, but it puzzled me how it can be.

Also, in general, a computer / IDE environment / browser would run just a single file and not multiple files stored in different folders, although it may refer to those little secondary files on the system that are linked in the main file?

Although there is a stackoverflow answer there, but its wording seems too technical. I am new to web development so it would be a great help.