Think of it same as cable providing Internet, with a cable modem, only it's digital TV signals that are being provided as a QAM signal to a receive only 'QAM modem'. QAM is just basically the same digital ATSC(8VSB) signal, but the QAM signal is more efficient, and requires a "cleaner noise environment" hence it's a cable only scheme. So QAM is not really a 'normal tuner' but more like a cable modem built-in to your TV. You may find you need to boost the cable signal for best QAM reception, especially if your house has multiple TVs running off a single main splitter.
When the signals are on the cable, or off the air, they are all analog. Digital is what does the modulating, not the transmitting. Since the demodulated signal is digital, it can be retransmitted with different schemes and be for the most part 'loss less' if desired. But compression is what cablecos do in order to increase their ability to carry more on their cables, and they are often lossy schemes. Your mileage may vary significantly when it comes to picture quality at the end user's site, depending......
Sometimes trying to simplify doesn't work right either ... YMMV