A port group is a group of ports, it is a child object of a vSwitch, and has certain distinct properties:
VLAN
Security policies
Teaming policies
A vSwitch can have just 1 or multiple port groups.
If you want all the VMs using that vSwitch (and the underlying uplink port) to leverage all the same properties as mentioned above just create 1 port group on the vSwitch and connect all the VM network adapters to it, but if some of your VMs need to be in different VLANs or use different security or teaming policies you would create multiple port groups and decide which VM network adapters to connect to which port group.
It is the vSwitch which offers the connection to the physical world, through the uplink port(s) you associate with it - the right hand side of the switch graphic in the screenshot you posted earlier. You don’t have to give a vSwitch a physical uplink port, for example if the VMs you connect to any port group on that vSwitch only need to communicate with one another and not the physical world. But a vSwitch must contain at least 1 port group or VMkernel port in order to do anything useful, as you have learned in this thread.
These are fundamental concepts of vSphere networking.