macOS itself is contained on a “signed & sealed system volume”. Changes can’t be made to macOS system files. No need to back up the system. Reinstall is how you recover from issues with macOS system. Your user files and installed software is what needs to be backed up and restored. macOS includes Time Machine for backing up and restoring these files but there are plenty of alternate back up solutions. Most folks find one they like and trust and stick with it.
All correct. With the post-catalina way that macOS organizes your boot disk (with two 'grouped' volumes, the system which is locked and untouchable to anything else than Apple and macOS installers, plus the "- Data" volume which contains everything else), the way it works now is that you back up the -Data volume only, and that's what most bacup apps default to, including Timemachine. BTW, I think it's one of the best moves apple has ever made to the OS. Makes for much greater stability and safety, at the cost of some flexibility for us users. (Like, it's no longer an option to have a disk image of say, your previous OS version + all data, and restore it if something goes wrong with an upgrade.)
Should you want to roll back to the previous version of macOS, you would do it with a so-called "USB installer". Lots of guides the web. Basically, you create a bootable external disk, erase the system + data volumes on the internal, and install the OS. Booting from the newly created OS on the internal, your mac will start as if it was new from the shop, and you'd create a new user, or import all the data and user(s) from your backup.
