Some campsites do not actually have places for tents - so the only option here is to pay for an RV place?

Yes.


Hiker/Biker sites are for tents and cheaper than the RV option?

Yes ... but not all campgrounds have those.


Campsites will refuse you if they are "full" and send you on your way even if there are no other options in the area?

Possibly.



So my next question is.....
For those recommending reservations in advance, how do you do that other than for a short tour?
Realistically, how do you know what date you will be at x campsite when that is 2 months after you start?
I can't imagine myself even booking something 2 weeks down the road - there's just too many possible variations that can occur in those 14 days.

It is a difficulty ... that is why many of us are prepared for options other than camping in a campground.

Also, with the booking ... it is important in National Parks, but elsewhere, not so much. It is important before long weekends, but on other weekends, not so much. It can be important on weekends in general, but on a Tuesday, not so much. And it depends very much where you are. If you're in the middle of Manitoba, probably not a problem. If you're heading toward Banff in Alberta, possibly a problem.