As per my understanding, the lighting network adds a feature where you a payment channel between to individuals where nothing is transacted until the payment channel is closed.
This is partially correct. Closing the channel records the final wallet balances on the blockchain. But the opening transaction that funds the payment channel is also an on-chain transaction that is recorded on Bitcoin's first layer.
This is to reduce the fees on individuals and number of transactions on the blockchain.
It's meant to help mitigate blockchain congestion, which used to be a problem in the past and is now a problem again following Ordinals spam. It's also a good solution if you make many transactions back and forth with the same person or business entity.
I assume the BTC lightning network is on the blockchain.
It's a second layer chain on top of the main (first layer). To enter it, you need to make a first-layer opening transaction. To exit and put your coins in your non-LN wallet, you must again make another on-chain transaction.
Also, there is no such thing as called original Bitcoin wallet, you can run a full node on other wallets too apart from bitcoin-core so the wallets are just acts as an interface to access the blocks where the funds are stored.
True, but OP is surely talking about the old Bitcoin Core, which was in the past both a wallet and mining software.