Sharepoint list items and 5000 item view limit

I am trying to understand the 5000 Items view limit and what it means, what are practical issues and solution.

When SharePoint allows to store 30,000,000 items in a list ,what is this 5000 limit means? Can I just implement paging showing less than 5000 items and the problem is resolved? Why do we need to talk about 5000 limit, when we rarely show more than let us say 100 items. Why not SharePoint eliminate this performance issue just using paging on all lists?

Thank you very much for your insights.

I am trying to create a solution where upfront I know there will be more than 5000 items. I do not want to use folders,  standard views, site hierarchies, and metadata navigation. but want to implement queries and paging. Will it work? what would be performance related issues if any.