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So why is 3 nm chip better?

Ok I think I do know the answer but I never learned it, so I want to learn it today. It's been about 1 year now we can reliably make 3nm chips, which is impressive on a scale of size. But why is is better? My theory is simply: We can make a product the same size but add more on it because it's smaller, making it stronger and faster for more complex operations. Which would mean it's not the chip that's impressive on its own, just the size of it.

Or there is something else, and I'd love to get the full explanation and understand chips better

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