No dumb questions at all. I've also been hearing a lot of this for the first time this week. You are very right with your concerns. Hardware wallets will likely need processor, RAM and battery upgrades and become more expensive. And much fewer transactions will fit per block, impacting scaling. Really seems like a very fundamental challenge to a lot of things that we may think were settled. But exactly how it will play out, no one can tell at the moment, AFAICT.