Conveniently I work in this space, but note the following is primarily my own personal opinion.

Primarily there's a few reasons I prefer Android Auto over native Android on the car:

1. Ever had a phone that's a few years old slow down in you? Now imagine you buy a car for $60k, and three years down the line the (already sluggish to begin with) Android interface is bogged down by updates and is barely usable. Imagine Spotify drops support for that version of Android Automotive. Android Auto puts all the infotainment into something the customer controls, and something external to the car so you are not dependent upon the OEM to do their own due diligence to ensure functionality and compatibility. If my phone slows down from age/wear/increased software demands, I go buy a new $400 phone. If my car's infotainment slows down I....buy a new car? (Looking at you GM)

2. Like I said it moves the infotainment to something in the customer's (and Google/Apple's) hand. OEMs do not want this. Auto makers want you locked into their proprietary Android skins for two reasons. First, making it more difficult to leave their specific company's ecosystem. They (will) build in their own apps that you'll start putting all your settings and private info on. Things like remembering a driver's preferred seating and mirror arrangement and auto-adjusting, so when your spouse buys a car you go "Oh well if we both have brand X, it'll be easier to drive each other's cars." Etc. Second, they want all of your data. Legitimately the industry is on fire right now figuring out how much consumer data we can scrape and use/sell with these systems. The Android Automotive stack in a car is 300% sending data back to the OEM of literally anything they are legally allowed to collect. Probably more, too. Plug in Android Auto from my phone and yeah they're still spying on me, but they don't have my Spotify login info or my specific apps used, they just have what the vehicle can directly measure (still a terrifying amount).

In your specific case with a third party head unit..go ham and use the stock interface if you want. Personally I'd still use Android Auto, to top off my phone and to access my local music library (I don't stream music), but a third party has a lot less interest in spying on you or locking you in the same way an OEM does.

Also out of curiosity, what head unit did you get? I've got a 2012 Cruze I've considered installing one of those on but I can almost never find anything that seems actually trustworthy.

In your case it is probably not necessary if setting up the tether is easier than plugging your phone into the USB.

However most cars don't have android running their head unit. Android auto is helpful for those people.

Apps for Android auto are specifically designed to be used on a cars head unit. Apps for Android normally are just tablet apps which can have small UI elements which are awful to interact with when driving. Notifications are handled differently than they'd be on a phone. Mostly just prompting you to speak your response instead of expecting you to type it.

Because Google is great at naming things, you might be getting confused between a few distinct products:

• Android Auto lets you tether your phone to your head unit (via USB cable, some units support wireless connections as well), and access cut down versions of some apps on your phone via the head unit - it's pretty common on first party units on late model cars, and has the advantage that you don't need a data plan (it uses your phone) and don't need to keep your phone and your car in sync - everything is running on your phone directly. Apple has an equivalent called CarPlay
• Android Automotive is a special version of Android designed to run directly on head units - it's licensed to OEMs and usually skinned to match the manufacturers branding. I've never seen Android Automotive in the wild (it's only available on first party units for some specific model cars), and I'm not really clear if you can install arbitrary Android apps or not
• Some after-market head units come with Android installed (they are essentially tablets in a head unit form factor with the appropriate I/O connections on the back) - depending on how professional the manufacturer is, they might brand this as "Android Auto", even though it has nothing to do with real Android Auto. These typically will never see an update, and probably don't meet the IP as specifications they claim. You can typically install whatever apps you want, but make sure you understand your local laws, where I live having a screen playing video "within eye line of the driver" will get you a fine and points on your license, so playing YouTube while driving is probably a great way to have an awkward conversation with highway patrol

I listen to audio books or podcasts on my phone while I take walks and want to continue those same books/casts while driving from the same place I left off. I couldn't do that with your configuration.

the only reason I use Android Auto is cause my head unit comes with pioneer's operating system and doesn't run android itself. otherwise yeah I guess it doesn't really matter what you use