Is alcohol just about flavor/effect tradeoffs, or do different kinds of alcohol have different effects?

The principle is that its all just watered-down ethanol, right? Can how its brewed change the way your body receives it and the effects? What makes an alcoholic beverage “good” or “bad”? Is there any reason to buy expensive alcohol other than for flavor?

I’m a young guy in my 20s trying to understand the culture around alcohol, and why theres so many options. Unlike carbonated sodas, which is dominated by a few competitors, alcohol has any hands in the pot and I’m curious why.