Well, more specifically, it’s a limit on the size of a transaction. Each transaction lists all vin (incoming transactions) and vouts (outgoing transactions) that tracks coins from where they’re coming from to where they’re going to. You can see this by looking at the api for any transaction. What you’ll see is that this transaction’s coins come form one transaction (probably a shielding transaction) since this is a payment made by a pool to miners – and the vout has a list of all the miners being paid.
When you have too many
vins, the transaction size gets too large and will be rejected. here is another example with multiple vin and vout. As you can see, a single transaction can very quickly grow in size.
Also, yes. More coins generally means more UTXOs being processed, requiring more compute and longer time to confirm as pools will likely opt to confirm smaller transactions first depending on tx fee.