Is the difference between physical terminal and Linux virtual terminal the use of serial cable?

In the early days of computing, the setup is usually like this: and we call the VT-100 "physical terminal". But in Linux, we call virtual terminals "virtual" (the ones accessed by pressing Ctrl + Alt + F*). What I don't understand is why do we call them "virtual". When you use virtual terminal, you are also sitting in front of a screen and you see texts as you type on a keyboard, just like when you are using a VT-100 terminal. How is this "virtual"? How is it different from using a "physical terminal" such as a VT-100? The only difference I can see is that when using a physical terminal you are using a serial cable to connect to the computer. Is using a serial cable what sets apart between physical terminal and virtual terminal?