Internally, uncompressed audio is just a series of numbers between 0 and 2^16 (or 24/32/64/whatever). Lets just for the sake of ease go old school for the sake of explanation, and imagine we're all 80s cats in mirror shades and akai samplers, and we're dealing with 2^8, thats a number between 0 and 256. So you divide that in two and the wave form is between -128 -> 0 -> 128 and that has to represent the amplitude of the wave at any point. The higher the number , the louder the wave. When a signal comes in LOUDER than that, the number cant be stored anymore, and it slices off the top of it and you get what looks a bit like a square wave, nasty nasty digitial distortion.
When thats upped to 2^16 thats 65536 (or +-32768) and gets exponentially higher each bit added to the number.
Now heres the thing. Because ultimately these numbers are representing physical waveforms, tat doesnt mean 2^16 is 256 times louder than 2^8, it means the signal is much more detailed.
Now modern DAC/ADC converters do have a lot more headroom, and some of that extra bit space can be used to let you go a bit further into "the red" without too much signal damage, but you cant just have infinite gain. because that means infinite amplitude, infinite volume, infinite speakers blowing out of cones, infinite computers catching on fire and ultimately infinite insurance premiums!
More bits = more detail, not more volume.
Windows 10. Intel i7 quadcore something. 16gigs ram. assorted mech and SSD hard drives.
Focusrite liquid pre 56. 2x Golden age 73 pres. FMR Audio RNC compressor.
Tascam 38 tape, and Yamaha 8 track cassette portastudio like a boss.