No, the pixels in the rounded corners would remain black.. within them would be normal icons/etc. not sure how much better I could explain it.
As for video, I was referring to movies which are well over 16:9. You would not get any black besides the specifically blacked out top and bottom to exclude content in rounded corners. Someone made a concept after I suggested to them how it could work to maximally use the screen for movies, and here it is:
View attachment 714323
The new iPhone is going to have rounded corners and they are not going to black them out. That would be a ridiculous waste of screen.