Hi Christina,
Between 1:1 and 1:n, there is a huge difference. Such as not being able to have more than 1 line in an invoice or having multiple lines in a invoice. Or having 1 contract max per customer or multiple contracts per customer over time. Or 1 product max in a shopping cart and unlimited number of products in a shopping cart. All of these examples make the difference between 1Million revenue and millions of revenue 
You are right saying that there is no need to use custom objects if you do not need a 1:n relationship. when a 1:1 relationship is needed, unless there is a specific need (such as access rights), adding fields should be preferred to using a custom object.
-Greg