Kronkelman

I have a few newbie questions about theme customisation. In the doom-one-theme.el file, all of the colour definitions have 3 arguments, commented as being "default", "256", and "16".

  ;; name        default   256           16
  ((bg         '("#282c34" "black"       "black"  ))
   (fg         '("#bbc2cf" "#bfbfbf"     "brightwhite"  ))

My best guess is that these refer to colour depths, but I'm feeling a bit out of my depth here (hah!). My questions are as follows:

1. How does Emacs decide which colour/depth to use?
2. Are these fields all required, or are they customary/nice to have?
3. Why are some colours hexes and others strings? Do the strings refer to some table somewhere with more hexes?

I would be extremely grateful for any clarity and/or links to relevant documentation where I can learn more!

Thanks