That model isn't right; think about a transformer - energy is transferred between conductors that are not physically connected at all.

Watch the video. Like waves in the ocean, are water molecules pushing each other and making the wave? Or is the wave carrying the molecules with itself? Or both things at the same time?

It's common parlance to say "DC component" to refer to any offset from zero in the AC waveform. So, for example, a typical analog telephone line when in use could be described as having a DC component of around 5 volts (referred to as the battery voltage for historic reasons), and then an AC component of around a few volts (varying by signal amplitude) is superimposed. Someone else mentioned the case of an AC signal with its center point not at zero actually being a pulsed DC signal... but both are correct in their own ways. An AC signal with a DC component will have its "neutral" voltage wherever the DC component puts it. This isn't usually referred to as pulsed DC because the AC signal usually starts out that way---as AC, and the DC component gets added. To receive the signal, the DC component is essentially removed. A lot of real systems end up this way either intentionally (in the case of phones) or unintentionally. Much of the time people talk about a DC component its in the sense of an undesirable one induced for some reason. Many people who use SDRs are familiar with this as common direct-conversion SDRs virtually always pick up a spurious DC voltage in the down-converter used to bring the selected frequency band into the range of the ADC. This results in the so-called "DC spike" in the middle of the tuned band.

Now, others have said, and elsewhere you have probably read, that telephone battery voltage is 48-ish volts (varies somewhat by central office equipment and line loss, phones are expected to tolerate a wide range). That's true, but when a phone is taken off hook it closes the loop (while presenting some resistance) and the voltage drops much lower. One of the odd things about DSL from a telephony perspective is that, unlike normal telephone applications, it is designed to function whether the phone is on or off hook. As a result, DSL devices do not make assumptions about the battery voltage, which during DSL operation can vary from off-hook of a few volts to ringing of around 100 volts.

Another odd detail of telephone circuits is that typical local loops use two wires, one pair, for audio both directions. The telephone, though, needs an "in" and an "out" to connect to the microphone and speaker. Similarly, the telephone network itself predominantly operates using pairs of two separate signal circuits, one for each direction, as this greatly simplified analog telephone systems and is required for digitization for digital ones. This is achieved by the use of a hybrid on each end of the phone line, which historically was a type of matching transformer that used some clever electrical tricks to provide three taps. One has signals both directions, the other two have one of each signal cancelled out based on matching or mismatching the impedance of the telephone line. It's a bit hard to wrap your head around and rather clever. Unfortunately hybrids, being analog devices, are never perfect and introduce some oddities on the line. DSL devices must use DSP methods to contend with phase shifts and other issues caused by hybrids. Today, it is increasingly common for not just telco equipment but also consumer phones to also use DSP instead of a hybrid to isolate the directions, since the DSP can self-tune to achieve a more perfect result. Amusingly, so-called "sidetone" in telephones (being able to hear yourself in the speaker) is an undesired result of imperfect performance of the hybrid but turns out to be an important comfort to humans, so DSP-based systems usually intentionally mix the outbound audio into the inbound at a low level.

All of this adds up to DSL being surprisingly robust. Unfortunately, there is a downside to the fact that DSL relies on frequencies beyond what telephone circuits were originally designed to convey: line loss of DSL signals is very high, which results in a rather short practical range for DSL, typically only a few miles even with a local loop in good condition. DOCSIS is able to achieve tens of miles, even at the very high speeds it supports, because coaxial cable and the fittings and amplifiers used are designed to carry high frequencies with minimal loss. Even so, the push to greater-than-gigabit speeds has required outside plant upgrades for cable networks, just as the push to expand DSL coverage (and less so, but in some markets, speed) has lead to outside plant improvements to the telephone network, such as heavy use of remote DSLAMs that "convert" most of the subscriber loop to a longer-range medium like fiber.

Plenty of opportunities for water ingress to still cause problems.

Historically there was a continuous upgrade of equipment as the technology improved. Manual exchanges became automatic, step-by-step gave way to cross-bar which gave way to electronic exchanges. Analog phones were replaced with digital and ADSL. And had that steady improvement continued, ADSL would have routinely been replaced with Optical fiber.

What stopped the perpetual upgrades was the arrival Thatcher/Regan/Howard and the advent of Neoliberalism. Which meant that anything which provided a Public Service (gasp Socialism!) was completely abandoned. We are only now starting to realise the long term cost of their vandalism.

That wet string would have been an upgrade for me.

GPON makes this scalable and affordable, but at the cost of technical complexity. Fiber (as in, the cables themselves) is far cheaper to produce compared to copper, but this has mostly to do with the price of copper and not manufacturing techniques.