Hi so when i want to receive some btc my hardware wallet creates a new address. I can then send the btc to that new address. so my total btc is listed as a collection of received btc at different addresses. What i don't understand is, if my seed words unlock one address, how do all these generated addresses get restored if i lose my hardware wallet. Hope that makes sense!
In very simple terms you can actually consider your seed phrase as the most compressed version of your master private key which is hashed to produce the child keys for each of the addresses you find on your HD wallet. So basically if you have the seed you automatically have all the private keys of every single address in that wallet.
People only use child keys sometimes when coin control is necessary or you have too many UTXOs. In all child keys are kinda like one time use on HD wallets because eventually the coins you send out go to the receiving address and chai address which also has a different child key.