> I thought as an outsider to the sport that F1 was all about engineering the best possible car and putting the best possible driver in the seat

The clue is sort of in the name; you make the best car within the "Formula", that's why its called "Formula One". The "Formula" is essentially the set of rules that sets constraints on what you can and can't build. You build the best possible car within the Formula. It's "One" because it's meant to be the pinnacle of single seat racing. It's been roughly this way since WWII.