Game-key cards are different from regular game cards, because they don’t contain the full game data. Instead, the game-key card is your “key” to downloading the full game to your system via the internet.
Pay a premium for a physical copy of your game, and the cartridge may not contain the actual game. Only on Nintendo Switch 2.
As I understand it, switch 1 digital games are console-bound, but you can migrate your whole console to a new device (such as if your switch breaks.). This was terrible and unfriendly, and why almost all of my family’s switch games are physical.
I doubt “share once and let everyone play but the owner” was an intentional promise from Nintendo, but I’d have no trouble believing a tale about their DRM checks leaving open a hole like that.