The issue DNS solves is the same as the phone book. You could memorize everyone's phone number/IP, but it's a lot easier to memorize a name or even guess the name. Want the website for walmart? Walmart.com is a very good guess.

Behind the scenes the computer looks it up using DNS and it finds the IP and connects to it.

The way it started, people were maintaining and sharing host files. A new system would come online and people would take the IP and add it to their host file. It was quickly found that this really doesn't scale well, you could want to talk to dozens of computers you'd have to find the IP for! So DNS was developed as a central directory service any computer can request to look things up, which a hierarchy to distribute it and all. And it worked, really well, so well we still use it extensively today. The desire to delegate directory authority is how the TLD system was born. The host file didn't use TLDs just plain names as far as I know.