Boiled down, the matte process is one whereby a limited film set may be extended to whatever, or wherever the director’s imagination dictates with the employment of a matte artist. In it’s most pure form, the artist would set up a large plate of clear glass in front of the motion picture camera upon which he would carefully paint in new scenery - an ornate period ceiling, snow capped mountains, a Gothic castle or even an alien world. An area of the glass is left clear and unpainted, through which the actors may be photographed simultaneously with the matte art onto the original negative, producing an entirely convincing ‘new’ shot without the need for the production unit to leave the studio grounds.
I. Love. Matte Paintings.
This is THE reason today's CGI effects tend to look fake. CGI leaves nothing to the imagination. Hyper-realistic CG effects fill in all the blanks that would normally be processed by the brain. Thus, not 'stimulating the imagination'.
The need to be 'real' also can compromise imaginative art direction. Look at the Herbie the Love Bug matte and tell me any production designer or director today would ok that. It's beautiful and we don't care if it's fake; if we're engrossed in the story.