The basic GUI experience in X is provided by the window manager. It controls how your windows are placed ( eg. Tiling vs Stacking / Floating ), how they are decorated ( eg. Max / Min / Close buttons ), and how they behave ( eg. Click to focus ). In X, the window manager runs as an application on the X server. You can only use one at a time.

In Wayland, the “window manager” is the display-server too and is called a compositor. For smaller projects, there are compositor libraries that provide similar capabilities to what the X server did so that these projects can concentrate on the “window manager” part. You can think of a Wayland compositor as equivalent to an X window manager ).

A Desktop Environment comes with a window manager ( or compositor ) and adds other tools that run alongside ( or on top of ) the window manager to provide a full user experience. This may include panels ( eg. think Windows start button, icon bar, and status tray ), docks ( like MacOS ), global menus, notification applets, and the desktop surface itself ( eg. are there icons or other features on the desktop ). A DE usually comes with a standard set of basic applications like a file manager, image viewer, document viewer, media player, and the like.

If you start with a basic window manager then yes you have to add all this other stuff yourself. Of course you may not want some of it and so can have a much lighter experience. You can also just choose tools that you like. Of course, they may not match visually or work perfectly together.

If you use a DE, the experience is curated for you and everything is more likely to work well out of the box. That said, nothing stops you from swapping out whatever components you want. You can even use a different window manager than the DE default.