you almost have to draw a picture to explain the fret/string contact.. But the simplest explanation I can give without stick people is...
you have a yard stick and you put one end on the floor, then rest it on a basketball. There is an area where there is real solid contact with the ball. With a string in fact, your pushing down, which even widens that contact area.
Now put one end of the yard stick on the ground, and rest in on a cardboard box. It's only has a thin line of contact. That's an exaggeration of what happens with the string when frets get flat. Instead of a good fat rounded contact patch, it might only be sitting on an edge of a fret, which will make the string lose volume and tone. It won't vibrate as much with a weak contact point.
