I prefer a more "physical" explanation - you have two carriers: sin(wt) and cos(wt), and you're modulating bits I and Q onto the two carriers and adding them up before transmitting. Now, mathematically, that's the same as representing the two bits as I+jQ and multiplying it with cos(wt)+jsin(wt). Demodulation is simply multiplying that output with the complex conjugate cos(wt)-jsin(wt), which in physical terms translates to mixing with a local oscillator output and low pass filtering.

There is a source block for your mic and or audio in. That was one of the first things I played with to understand sdr. I remember seeing a strong tone on a waterfall plot that I could not hear, thinking it was an articfact, then looking at the frequency and realizing I wouldn't be able to hear it. Turned out it was a crt TV. That kind of dates the story. Fun to be had.

Not just RF, also optical communications. Really, the only domain left where PAM transmission is used is baseband communication for electronics, and datacom for optics.