It seems like the central innovation is the construction of a "model" which can be optimized with gradient descent, and whose optimum is the "simplest" model that memorizes the input-output relationships. In their setup, "simplest" has the concrete meaning of "which can be efficiently compressed" but more generally it probably means something like "whose model complexity is lowest possible".
This is in stark contrast to what happens in standard ML: typically, we start by prescribing a complexity budget (e.g. by choosing the model architecture and all complexity parameters), and only then train on data to find a good solution that memorizes input-output relationship.
The new method is ML on its head: we optimize the model so that we reduce its complexity as much as possible while still memorizing the input-output pairs. That this is able to generalize from 2 training examples is truly remarkable and imho hints that this is absolutely the right way of "going about" generalization.
Information theory happened to be the angle from which the authors arrived at this construction, but I'm not sure that is the essential bit. Rather, the essential bit seems to be the realization that rather than finding the best model for a fixed pre-determined complexity budget, we can find models with minimal possible complexity.