> are just drinking more often but smaller amounts?

Probably. I don't measure my water consumption, but I'm guessing that I drink smaller amounts. Even if my average hydration level is the same, it never goes too low this way, which means that I feel better.

I don't have any objective way to measure the health benefits of drinking a certain amount of water, but it definitely makes me feel better to be more hydrated, so I'm guessing it's good for my health.

When it comes to physical activity (sports, weight lifting), I have read that muscle performance can be greatly impacted by inadequate hydration. So while you may not feel thirsty, you could be forcing yourself to work harder than normal simply because your body is not operating efficiently.