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The seed phrase is a word representation of a big random number. It is created because it is easier to write down without making mistakes.
The random number is used by the cryptography algorithm to create many private/public key pairs and associated blockchain addresses.
Each coin/token has its own address.
Added info- the cryptography algorithm is deterministic meaning if you start with the same random number you always get the same keys and addresses. This is why the seed phrase is also called a recovery phrase and why you should never share it, especially to strangers on the internet who offer to help.