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QUESTION: How does file-level backup work?
ANSWER: Consider the following example from our everyday life: You need a copy of some paper document. In general, you have two choices. You can photocopy the whole document or just write down the very piece of text you need. Traditional (sector-level) backup is like the photocopy. It makes the most identical copy of data to your storage (just like photocopy of your document, point-to-point, scratch-to-scratch). When it comes to restoring traditional archive, this exact copy is just being reproduced back to storage.
File-level backup, just like the second option, does not make an exact copy of the data to storage. It gets and stores the meaning of the data. Going back to our example, the same words are being written down, disregarding the font, size, color and so on. When you need to restore file-level archive, it re-creates every separate file from the ground up.