How does Qubes OS work?

VMs are already preinstalled for you, see here.

There is in practice nothing more secure than hardware virtualization, which Qubes uses by default. VM escapes are practically non-existent with such a measure.

Apart from virtualization, Qubes provides a great, unified interface, where VMs are shown as normal windows with colorful borders. Also, with easy copy-paste and file transfer, automatic backups, self-destroying VMs and much more.

No, and you don’t have to do it on Qubes (although some people do it). You use VMs as security domains, inside which everything is equally secure. For example, you do everything related to your work in one VM, everything related to your hobby in another, and everything related to your banking in the third one. Extended examples: one, two.

Debian is installed in Qubes by default, along with Fedora. Apart from them, threre are more operating systems, including Gentoo: Templates | Qubes OS.

See also my attempt to explain the feature of Qubes OS in a short pitch.

Most important is to have a lot of RAM. With 8 GB you can already have some compartmentalization, but with 16 it feels much better.