Coming from other distros like Debian or Ubuntu, I'm used to package versions being set at the moment a distro version is released, and then those packages pretty much just get bugfixes until the next version of the distro in 6 months/2 years/etc.
I started using Fedora recently, but it looks like for a lot of packages, all currently supported Fedora versions get the updates, not just the testing branch (for instance, when Plasma 5.27 came out, every active Fedora version was updated).
Does Fedora just use distro version numbers for specific core package versions, or is there something I'm missing here?
Well, there are limits to the updates. It's not quite like a rolling release in that some software will get minor release updates, but not major ones (like GNOME is frozen on version 43 for Fedora 37 and 44 on 38 respectively). The software that typically gets major updates are the kernel and applications. So it's basically a range of updates.
Once the release goes out of support, it won't get any updates either. In a rolling release, you have no actual versioning of the distro itself, and it can perpetually go on with updates forever. That's not going to happen in Fedora Linux. You still have major point releases of the distro itself.