How does the “block parameter” work with RPC calls? Do light nodes have access to historical data?

Question

I'm looking at the RPC spec. Many calls (eth_getBalance, eth_getStorageAt) allow for a custom "block parameter" where I can pass in any block number.

How does this work? Does each node maintain a copy of the state for each block (I assume not). Do nodes synced via --fast have access to blocks before they were fast synced?

Cheers -Aakil