Is VPN all about encapsulating the source and destination IP address?

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shivajikobardan
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Homework Statement
VPN-Virtual Private Network
Relevant Equations
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What’s encrypted here? Is the source and destination IP address encrypted? Is the firewall1 address and firewall2 address encrypted? Is the payload also encrypted?
Is this all what a VPN does? I can’t really believe that VPN only encapsulates and encrypts.
If it’s encrypting the source and destination IP address, is encapsulating with firewall address necessary? Because nobody is going to find about that.
Diagram of a VPN between two private networks: Network 1 with computers including X, behind Firewall 1, linked over a VPN tunnel through the Internet to Firewall 2 and Network 2 with computers including Y.

Diagram of an original packet: a box labelled Destination address above a row with cells X and Y followed by Other headers and actual data, with X shaded and labelled Source address below.

Diagram of a packet before and after Firewall 1 changes it: the top packet has X, Y, then other headers and data; the bottom has F1, F2, additional headers, then X, Y and data under settings-dependent encryption and authentication.

Diagram of a tunnelled packet: top row shows fields F1, F2, a dark block, X, Y, and other headers and data; below, after a dashed arrow labelled destination address, the packet shows X, Y, and other headers and data with X shaded as source address.

I feel I'm missing some crucial information about the intricacy of VPN working. So, please guide.
 
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It's from the book "Cryptography and Network Security " by "Atul Kahate". I still don't get how is this about VPN? This looks about Firewalls.
 

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