We don't manage the database for customers; we instead connect to your data (whether it's behind an API or database). That was one of the first decisions we made — as a developer, if my data is already in postgres, I certainly wouldn't want to have to ETL / sync it anywhere. :)
Use cases: probably our most common use case is a CRM for a consumer company (e.g. Doordash). The reason that is so popular is because if you have (say) 1M orders a day, you aren't able to put that data in Salesforce anymore. And so the only way for you to manage all that stuff is by building custom software (instead of buying anything off the shelf). Retool is good at that: you can build CRUD-y screens very quickly. Retool, today, is not good at making everything pixel perfect (e.g. we have a grid layout engine, and you can't break out of the grid), but a CRM doesn't need to be pixel perfect.