For your lightning wallet, there is on-chain and off-chain balance. When you are sending BTC to your lightning wallet using another type of on-chain wallet, the new funds will be added to your on-chain balance. The off-chain balance is what is locked up in your open channels. When you open channels you are sending your on-chain amount to get locked into a channel with your partner. So this becomes off-chain amount. When you close channels you receive your sats into your on-chain wallet. The ideal case for most lightning channels is to have some inbound liquidity and some outbound liquidity so you can route transactions and as a benefit to you, earn routing fees.
Once a lightning channel is open it will always remain the same size while open (remember that a transaction was already entered into the Blockchain). What changes is how much inbound and outbound liquidity there is (i.e., are the sats on your end or your channel partner’s end). When you pay invoices your sats go to your channel partner’s end (i.e., your outbound liquidity that you transferred ends up as inbound liquidity). When you collect routing fees, you receive more sats into your channel via your inbound liquidity than you send out. Ex: Through routing a transaction your inbound amount is 100,500 sats and your outbound amount is 100,000 sats. On the inbound channel your inbound liquidity reduced by 100,500 sats and on the outbound channel your inbound liquidity increased by 100,000 sats. You earned 500 sats through that routing. You will likely need to constantly rebalance your channels to allow them to continue to route effectively.