Nor are they output channels. Although their output can be routed to an output channel.
From the OP it sounded like they had a bunch of output channels that they didn’t want to see. For example if your audio interface has 8 outputs on it they will all be available in Cubase, even if you only have 2 of them connected up to anything (i.e. your speakers). In that case the other 6 outputs are just visual clutter - until you decide you want to send something to an external effect you’ve borrowed or whatever. The place you control which output channels Cubase uses is in the VST Connecions setup. The key is that Cubase can access all the available inputs and outputs that your audio interface has, but Cubase will only be able to use those inputs and outputs that you enable in VST connections. But you can save different setups as presets and change them as needed on a project by project basis.
Group tracks/channels are used for internal audio signal routing. They can receive audio from any audio source except an audio input channel. This means in the mixers routing section you can’t select an input source for a group channel. The only way to get audio to a group channel is for another audio channel to send its output there. So you can send the output of regular audio tracks, VSTi’s, FX channels, and even other group channels to a group channel. This provides a very flexible scheme where you can do complex routing. But that said, the most common use is for creating sub-mixes. For example sending five backing vocals to a group channel where you’ve inserted a compressor and also have a send going to a reverb.
Cubase has a bunch of different channel types and taking a good look in the manual at how they are different and similar is pretty beneficial.