In the 60s when I was in art school we learned to set type in a job stick (as you illustrated) with lead characters. By the time I was in the business, cold type had come in and was being used. Cold type was based on photographic matrices.
Tracking is what we would have called letter spacing and you are correct, it is much easier to do on a computer.
I find tracking is excellent when working with paragraphs of text for removing a tiny amount of space to bring a widow back into the text or to add a tiny amount of space to make add a word or two to fill out a widow.
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