Money is a proxy for resources. If you boil it down to the essentials, income is the way we allocate the resources available to us to different individuals. It is not intrinsically a reward for work. It isn't even directly linked to work anymore in our capitalist system. The people who work the hardest don't have the highest income. The way the system currently works is that those with the most resources get the most additional resources, simply because they already have a lot of them.
This is the one thing I find most strange. In some cases we pay more for higher skills that are harder to come by, but that seems far from the only thing causing this.
If there are 100 people willing to work hard, but we only need 90 of them, they will get paid little, because any of them can be easily replaced.
If there are 90 people with some rare skill, and we need 100 of them, they will get paid a lot, because any of them can easily find a new job. (In theory. In practice, the employers will take some coordinated action to prevent this.)
Ironically, doubling the productivity of the people with the rare skill could dramatically reduce their income, because now there are still 90 of them, but we only need 50.
The other factor to consider is that the nice-to-have wants from greater productivity in labor may just be required for me to accumulate more scarce resources especially as the population of the world grows. Opportunity cost eventually make me prioritize my investment elsewhere rather than adding scope as you say.
The industries where AI doesn't touch/win, or have real world scarcity constraints even in the face of AI is ironically where the power will be. Hence people saying to get into trades, and physical skilled jobs where we are still winning the arms race against AI for some time yet.
What is income? What is it used for?
Answers: it's a reward for work. And it is used as an incentive to get others to work.