I think there's some argument about what a 'proper mesh' is, but basically, the nodes just talk to each other rather than a central hub. So the one in my office is talking to the one in the bedroom upstairs, which is talking to primary node in the living room (that then links via a powerline adaptor to the cupboard under the stairs where the BT homehub has been confined, for its sins, in modem-only mode).
The downside, of course, is that the mesh nodes have to use up bandwidth to talk to each other (like extenders). But there's no shortage in most home scenarios. Three nodes cover my house and ensure I get a full signal in every room (and the back garden) and I've not had a single drop out since I installed it.
Yes, mesh allows the nodes to comunicate through each other, with multiple possible routes, to get back to the router/wan/lan connections.
The better current kit uses three bands, allowing one (5GHz) band to be dedicated for 'backhaul'. It's impressively fast - my asus kit is much faster than my broadband connection or my NAS drive. OTOH that allows anything and everything to work concurrently.
The price differentials mostly seem to revolve around the number of radios and whether or not there's a dedicated one for the backhaul. Some also let you use wired connection, though that seems a little self-defeating unless you're just using the node for roaming devices.
For a non-fibre connection, the basic stuff seems to work. I get around 867 Mbps wireless and full speed internets on every connected device that supports that speed (some of the older kit only does 300 Mbps).
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