Switching from 11R 22.5 to 295/75R 22.5 Volvo VNL 670

I still can't wrap my head around it! And I've watched a bunch of Youtube videos. LOL. This is how I'm trying to approach this: If I punch the throttle to do 65 mph, and the tach says 1350 rpm (just a thoeretical), the only thing I see changing is the distance. The truck THINKS it did 65 miles in that hour (because that is where the speedometer stayed at for that hour of driving), but in reality, it might have done 63 miles in that hour traveled (another theoretical) due to the smaller circumference of the tire. The truck doesn't know what tires it's wearing. Am I on the correct path here? So basically, the truck did what it was supposed to do according to its programming, the only variance being the distance traveled. Correct? Is this why the speedometer needs to be reprogrammed?

So how does all this affect fuel efficiency and pulling power? Why is one ratio better for mountains and another better for the plains?

I think what is really giving me a brain-twister is that I thought that the factory ratio was fluid, not constant. It makes sense. So what this tells me is that gear on the axle is a solid, permanent piece at one with the wheel. It doesn't matter what size of that gear is physically, because one turn of that gear equals one turn of the tire. Am I on the right track here? Please correct me. I think I'm ALMOST there...

 

Ahhh...So a higher cruising rpm equals lower gas mileage? So instead of me doing 70 at 1500 rpm, the number would rise to 1600 rpm (theoretically)? Actually, going by a previous post, the truck will still do 70 mph at 1500 rpm according to the speedometer, but it actually didn't really TRAVEL 70 miles in distance. Correct?

 

So basically, the lower the rear ratio, the bigger the actual gear? So, a 3.32 is bigger than a 3.55?