X11 is the display server. Your desktop environment, like gnome, has a window manager managing your opened applications and tells the display server "please render this stuff on the actual screen".

X11 is ancient and sucks, because for example, it can't do fractional scaling well, which is important for screens that have a higher resolution, since everything appears tiny otherwise.

The display server also offers some functionalities that the desktop environment can make use of, like global hotkeys, or screen sharing.

I'm not an expert or anything, but I think it's about right like this.