Sort of, though Wii and Wii U are a bit more complicated than that so this somewhat of an oversimplification. The ELI5 answer is that some hardware components are directly upgraded and can run in a compatibility mode, other components are just the original hardware thrown in separately.
New3DS is the most recent and most notable exception. It's directly upgraded 3DS hardware, but the CPU downclocks to run at 3DS specs on all legacy titles (and there are almost no native New3DS games so this upgrade was pretty pointless). Softmodding can unlock the full clockspeed, and most games do work fine this way but there are a few rare bugs.
I expect Switch 2 will just be the same architecture upgraded, because that's a lot easier to do now, while the old style of true redundancy would inflate costs too much today. It's also worth noting that Switch titles already expect variable performance in order to support handheld and docked modes, so I doubt much would break if allowed to overclock. But I could also see Nintendo not even trying to support it if even one bug might exist somewhere.
I wonder if that and/or Labo might be what they meant by the disclaimer that backwards compatibility might not support all titles. Since it's built around old Joy-Cons, might not work with new ones, unless the Switch 2 can just use original Joy-Cons.
Could also be an excuse for Ring Fit 2 built around new Joy-Cons.
Of course there's still a lot of cool stuff coming from indies, but there's a wide spectrum between indie with no budget and AAAA with $10 trillion budget. We're losing everything that was once in between.
Also, spinoffs. I do like seeing alternate takes on IPs and characters I like, but those are rare now because all the resources go into developing one main project. Like I've always wondered, if Splatoon had debuted a generation earlier, what kind of DS companion piece would have accompanied it?
To me, what I dislike the most about the direction the industry is going is that consolidating more resources into fewer megagames means there's less room for experimental side projects and spinoffs. I especially miss all the kinds of B-games that used to go straight to handheld. Of course part of the reason they disappeared because we don't have handhelds to put them on, but I think that half the reason handhelds died was because publishers weren't going to make handheld games for much longer anyway.
I'm still holding onto the dream that we'll get SteamOS onto something small enough to fit in my pocket and run all my favorite 2D indie games. First manufacturer to do it gets all my money.
I bought a Miyoo Mini Plus a while back, purely an impulse buy for how cheap it was on sale, and ended up putting far more time into it than I ever did with my deck. This is the cozy form factor I need.