Does this mean if you copy and past (sic) an image or video into a Google Docs or convert a PowerPoint presentation into a Google Slides this wouldn't use up any space?
Yes, that means that. It's worth to note that Google Photos has an option to store photos without using any storage quota.
Are there tools for doing this in bulk?
For example, you have 20 images could they automatically be copied and pasted in Docs named after the image names themselves?
You could use Google Apps Script of the Google Documents API to add images to a Google Documents document.
For photos you could use the Backup and Sync tool for PC / Mac or the mobile app for Android / iOS.
NOTE: To ask for a specific software recommendation please ask on https://softwarerecs.stackexchange.com
Or ten .pptx all be converted to a Google Slides?
You could set Google Drive to automatically convert uploading files or you could use Google Apps Script or the Google Drive API to convert web hosted PPTX files and other files formats to their Google "equivalent".
There is a gist and other examples on the web that uses Url Fetch service to do these conversions.