Does a smart contract come into play if I make a simple Ethereum transaction like sending someone an amount of ETH? Or do smart contracts only apply when I wish to implement additional functionality (Dapps) on top of the Ethereum blockchain? Trying to understand if smart contracts are a thing with “native” or “basic” Ethereum transactions.
Ethereum accounts can have code associated with them. Externally owned accounts (the kind that you, for example, have) don't have any code. Smart contracts do have code. If you send a transaction with a "to" address that has associated code, that code will execute. Otherwise, no code is executed.
So when you transfer ether to an account that doesn't have any code (isn't a smart contract), no smart contract code is executed.