Long term future of Bitcoin

Hi - can someone ELI5?

I’m struggling to understand something about the long term future of bitcoin use.

There is always going to be an erosion of bitcoin supply over time - eg lost/forgotten keys, death etc.

With normal currency the lost/damaged notes can be reprinted by the government so that there is no loss of physical supply and it is still usable

If there is a finite supply of c20 million bitcoin (with each being 100 million satoshis) then what happens when there is eventually not enough usable bitcoin left?

Is it just that the existing bitcoin are subdivided in to so many satoshis that it’s not felt to matter and that the satoshis will just become more valuable?