NFTs are just digital art, music, video games, etc.
NFTs have multiple use cases and digital arts, music, video games are just part of them. In future, the NFT technology will be used in more industries such as finance, data storage (we already have some data scientific companies apply NFT for health records, etc.), land or human resource management, etc.
Last two years, NFTs are hyped and cause people to think it as a scam trend but time will tell and above are my opinion. I aware that there are many scam projects were created recent months and try to abuse the NFT trend to steal money from inexperienced and naive investors. However, don't equate scam projects with good projects. They can be created by same technology but good are good, bad are bad and scam are scam.
that are coded into the ethereum blockchain, correct?
Inaccurately! NFTs can be built on different blockchain, ERC20, BSC, SOL, DOT, Polygon, AVAX, etc. The trend is projects try to build up their products on multiple chains, cross-chain.