> I've always been curious - but presumably that’s true even after volume matching?

Yes. Many musicians want their stuff to sound like the music of their heroes they grew up with, and that music is often compressed to a block as well. So compression isn't just about making things sound louder, it also has its own aesthetical value. Whether that is good or bad aesthetics can be argued about, but some people also like to distort their instruments which was also a thing people frowned upon in the past.

> I’ve heard this is also why film and video game soundtracks are often very compressed, even when orchestral, because they have to fit in the background with dialog/sfx

The official themes often are quite compact, but there is often also highly dynamic orchestral work used that is way less recognizable and used with more dynamics (think about te soon creating orchestral atmospheres). Cinema mixes are a thing btw. where many consumers complain about too high dynamic ranges. They complain that the dialog is low and the explosion loud. Cinemas being among the few spaces we mixing engineers have where we have a bit more control over the presumed levels, especially if we are talking about Dolby certified venues.