The newer low-end models have various changes from the previous high-end models, including case changes, but also other hardware. The original low-end iPhone SE had the plastic case with the hardware of the 5-something - but a smaller display. The iPad mini had the guts of an iPad 2, except it was a smaller device, requiring a new motherboard and display, and it had a better camera, too.
Similarly, the 2017 iPad was closest to the iPad Air 2, just a bit thicker with more battery, but it also had a new CPU and brighter display.
That pattern of component upgrades and size changes continues, and as the GP mentioned, Pencil 2 support (magnets and charging) hasn't trickled down to any non-pro devices yet, in spite of new releases to those non-pro devices.
My son's friends make fun of him for the small screen size of the SE compared to their 7s and 8s but he just says he's dropped it hundreds of times and it's working fine. It's in a case, of course.
You're thinking of the iPhone 5c, which came out at the same time as the 5s -- well before the SE, which, slightly confusingly, was released after the 6. The SE has always had a metal body.
So that gives another example of apples making a new low-end device from a mix of old and new components.
5c new plastic body, better front camera and LTE than 5.
SE new low-end device with display of 5s, processor and back camera of 6s, front camera of ??, etc.
Apple doesn’t really release new budget devices; the case may change, but once technology has advanced enough to release an improved top-end device and parts prices for the existing product have fallen enough, they package the parts of the former top-end device in a new lower-priced device.