correct

Lightning is pretty close to on-chain bitcoin because you could, in theory, close your channel and get a UTXO with your lightning balance. But you have to pay on-chain fees, so it doesn't really work if your balance is too small.

Can you convert a nickel into a gold coin? In theory, yes. In reality, no, because a nickel is nearly worthless. No one is going to bother self-custodying 5 cents worth of gold.

Instead, you get a big jar and slowly fill it with pocket change. When it's full, convert to hard money. Same concept with ecash but the lightning channel is your jar. Same concept with lightning, but the UTXO is your jar.