I'm still picking up the pieces but from my logs I can see that hundreds of successive login attempts were made from different IPs, effectively circumventing fail2ban with what I can only assume is some form of automated IP spoofing. I'm hoping that strict ipv4 settings and ssh ip range restrictions will mitigate this in the future. I also used this python script to harden my SSH security with better algorithms. https://github.com/arthepsy/ssh-audit

No, you were not seeing spoofed traffic. There are that many compromised machines actively scanning.

It's scary to admit this but you are probably right. The first thing these bots do is use server resources to scan ports and brute force their way into other machines. I don't want to think about how many machines are pwned like this. Very sobering!

This is also perfectly normal for the Internet, yes? If you have a server with an IPv4 address, expect many attempts per day.