Most car bluetooth systems use SBC Codecs which is a difference way to compress audio data than the AAC source data on an iPhone. The hardwired (Lightning to USB (carplay)) method will transmit the audio based on the source quality from your phone -and assuming the source is AAC files from Apple Music, the main reason it sounds so much better is not because bluetooth is "noisy radio connection", it's because the audio is being compressed a second time using the SBC bluetooth codec in the car.
As an analogy, imagine you speak English, AAC translates to Spanish, and if hardwired, your car stereo translates it back to English, not great, but the will likely have the same meaning. Now take your original source, translate to Spanish (AAC) now translate that to German (SBC) and have your car stereo translate back to English - nowhere near as good a translation.
One of the things that's great about Apple/AAC is that the same method to compress audio is used throughout the ecosystem so that an AAC file streamed from Apple Music servers to your iPhone through bluetooth to an AAC supporting headphone doesn't experience further degradation at each point along the way. The Mastered for iTunes program (myself and one or two others linked to the pdf outlining the process) does make the process of converting original source material to AAC less harmful to the original recording, but nevertheless, still a lossy format.
Also, back in the day, what we are calling lossless (CD quality 44/16) was bashed when it came out by audiophiles for a myraid of reasons - some more rational than others- but even CD quality is still 'lossy'.. just a question of where you want to stop.