More eye candy yes, not always more realism per se, not all games strive for realism for example TF2 is a cartoony game. However the fidelity and the accuracy of the effects, textures and models all tend to be increased with high or ultra settings.
Sometimes it's not just about graphical fidelity but sometimes it can be about increasing the amount of entities in the game world, for example GTA5 you can increase the number of pedestrians and the amount of traffic on the roads, so the quality is the same but the quantity is higher.
The lower settings are available for people with slow or old PCs who cannot run max settings, lower quality graphics run faster and are more suitable for these kinds of computers.