Simply put, “Fungibility” is the ability of a thing to be just like any other thing. Like how a dollar bill is just like every other dollar bill, even though it has a serial number which makes it special.

Cryptocurrenties were designed to be fungible, even though all they are is really large random numbers protected cryptographically by other large numbers. The NFT folks realized that you can add context to those random numbers to make them “one of a kind” - Non-Fungible. Kind of like how some Pokemon cards are more expensive than others (of the same rarity) because of what’s printed on them.

That’s it! That’s all it is. No clue why they got to be worth a thing more than a Pikachu.