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Yeah, as long as you exclude media like images, the entirety of Wikipedia can be compressed into hilariously small sizes. The “only current revisions and no talk” version is only 86GB uncompressed, and compresses down to 19GB.
There are even specialized readers that can read the compressed data on a page-by-page basis so you don’t need to decompress the entire thing to browse it.
It’s a directory. When you create a new note, it creates a new file inside of that directory. My point was simply that you can always just browse the directory and read the plaintext file for whichever note you want. Obsidian simply adds things like text formatting and automatic links to other notes.