Formula 1, explained for rookies

Tell me if I'm wrong but don't they limit how much a team can technically advance their car. 

Which kind of Trump's the whole car innovation statement. I'm not saying they don't make technological achievements. But they're only really allowed to tweak small things from what I've seen. Not really any big changes. I can kind of understand why they can't, what with other teams having more funding and leaving the smaller ones in the dust. But it does kind of diminish the innovation statement.

Again tell me if I'm wrong, I'm mainly curious