Domain are like number on your house, and hosting is your house.
Domains help to distinguish which house is who.
When you want to build startup or website, you probably start from inventing its name, then you have to check if this domain name is free, then check which domains are free. For example,
MyTool.com is occupied, but MyTool.info - might be free.
Domains are not your property even if you bought them for year or two. It's like renting a car, as long as you pay for it - is yours.