Everything made by humans is made up. Words exist to explain concepts. At one point, chair was a word someone made up and now it's a commonly known, understood, and used word.
You could ask “Why do we need so many terms to exist?” and I could reply with “Why do we need the words for bench, chair, couch, love seat, rocking chair, etc to explain something we could already call a sitting place?” These terms are used to explain specific sitting places just like lgbtq terms are used to explain specific identities and how people experience attraction.
Some people like guys, some people like girls, some people like both, and some people like none. There are also people who have attraction to others, but the attraction is not based on physical appearances which means additional terms are needed to explain concepts that go beyond gay, lesbian, bisexual, asexual, and straight.
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