Really, your question is, "why do some people like different things to me?" but you've implied that anyone who enjoys this must be some kind of philistine, instead of just having different goals to you.

My parents are at an age now where their health doesn't allow them to travel long haul economy without great discomfort, and they find business class travel extortionate, and not much better. They also dislike the security theatre and waiting around associated with airports. Train travel is a pain because they have difficulty transporting their luggage if a porter isn't available, and they don't always feel comfortable with a self-organised holiday. They used to do holidays involving long coach trips, but again, they don't find it comfortable to be sitting down for more than a couple of hours.

A cruise ship picks them up at the dock about 45 minutes' drive from their house, where there's ample cheap parking, then floats them away. As far as I understand, their bags are delivered to their rooms. During the trip, they are free to walk around the ship at will, there's no seatbelt signs. They can visit a bar, sit by the pool, or read a book on their private balcony with a sea view. They can talk with other holidaymakers or keep to themselves. Every day they wake up in a new city, often one they have been longing to visit, and they go on land and walk around. If they don't feel well one day, they can just stay on board, no pressure to keep up with a group. The cruise ship arranges local guides at each stop. If weather or other problems interfere, the captain makes alternative plans. Before they can get bored, it's off to a new place.

They don't have to pack and unpack their bags every day. You can call the on board facilities tasteless, and I get it, a lot of people only want to dine somewhere with a Michelin star, but some people are just happy with edible food. There's some kind of evening entertainment as well.

It's not for me; but it's not my vacation.

I understand your arguments and I even relate to them. You have to think differently though.

Many of these ships do daily stops in different cities. They navigate during the night and stop during the day. Now imagine a hotel where you would wake up in a new city every day. Instead of driving or taking a train you could actually go to the pool, have dinner and have a good night sleep. The next day you could explore a new place and know the culture of the country of your choice. If you do the math and factor all the aspects - food, travel, night at hotel, the cost of such trips can actually be reasonable if compared with the equivalent life style outside the boat. Plus you save time and hassles since you travel while sleeping.

Humans were always fascinated about doing things that they are not designed to do by nature, which includes flying, diving, floating on the sea, etc.

Also, humans are fascinated by hotels and the goodies that come along with hotels. Somehow they make us feel "rich" even if the money we used to book the hotel is loan money.

You can do these two things at once! that is cruise ships.

Some bits of your post has the answers to your own question:

but rather to "allow them to be on the sea for X number of days/weeks"

Exactly, people who are designed to walk on earth, love to float on the sea for a change.

I don't want a stupid wrist band registering every move I make, or face scanning to board the ship

Wow, that will make humans feel special and privileged!

It's like, you imagine this floating paradise, away from any city or country, like a space ship floating through space

Enough said! take my money and shut up!

Why don't you feel the same?

Well, again from your answer:

Growing up, I used to go on these much smaller ferries, which themselves seemed huge to me

You simply are not fascinated by the idea of floating on the sea or boarding a ship. You depleted your "excitement".

I'm gonna be blunt: most of the areas look horribly "tacky" and tasteless, and seems to be be made for a generic mix of "consumer-mindset" people

Exactly, some people do not fall for these traps! luckily for business owners, they are the minority, you are among this minority.

In my opinion, any experienced traveler would pick a different type of traveling over these huge cruise ships. It is, in my opinion, the opposite of the concept of traveling and the freedom that comes with it.

A seasonal traveler or a person who plans a once in a lifetime trip would easily fall for this, it will give him/her everything in one shot, including stories to tell people and something to brag about. Also, cruise ships are somehow related to "romance", as does Paris. I would never go to Paris to have a romantic time with my partner, but try to explain that to an inexperienced traveler. It's a myth that people want to really believe.

Some of us like to go to 'all in' holiday resorts, not seeing anything of the country they go to but the transfer from and to the airport, others go to the same country but would not want to even enter such an 'all in' resort. Both can be happy at the end of their trip, as long as they have chosen the right holiday for them.

Cruise holidays are the extreme of 'all in' resort holidays for many, have all entertainment and comfort, no worries about getting places, and still see some of the places you travel through.
Others use cruise travel to actually see places and use the cruise as a kind of ferry to get them from place to place, enjoying the comfort or the lack of need to pack-up and move, as an easy way to travel.
Others again make the mistake of going on a cruise while they should not have done that, as they do not enjoy the experience.

I fear that both you and I fall in that last group, me at least for now while I can still travel on my own.
I guess you and I will also not be seen in one of the 'all in' holiday resorts where you do not even leave the place to look around the area.

In short:
They serve a kind of holiday makers who love this kind of travel.
And as you can see from the comments on the question and the other answers, there are many people who do like that kind of holiday. Even when they did not think that they would when they had not done it yet.