Why does my computer work fine in safe mode?
Because safe mode starts the system with the minimum required to run — and if the problem disappears, the cause is something in what was excluded.
What safe mode does not load:
Third-party drivers. It uses generic Microsoft or Apple drivers instead of manufacturer ones, particularly for graphics.
Startup programs and background services from installed applications.
Non-essential system services.
Network drivers, unless you chose safe mode with networking.
Custom display settings, which is why the resolution is low and everything looks large.
Why this makes it a diagnostic tool rather than a fix. Safe mode does not repair anything; it partitions the problem. Working in safe mode and failing in normal mode is strong evidence of a software cause — a driver, a startup item, or a service — and effectively rules out most hardware failures, since the same hardware works.
Failing in safe mode too points the other way: hardware, firmware, corrupted system files, or a failing drive.
How to use it properly. The reliable technique is a clean boot rather than safe mode itself — disable all non-Microsoft services and startup items, confirm the problem is gone, then re-enable them in halves rather than one at a time. Binary search finds the culprit in a handful of reboots instead of dozens.
Graphics drivers are the most common single cause, particularly after an update. Safe mode is also the correct environment for removing a bad driver, because the driver is not loaded and therefore not locked.
Other things safe mode is genuinely for: uninstalling software that will not remove normally, removing malware that cannot start, and rolling back a driver.
Macs use Safe Mode similarly, and additionally verify and repair the startup disk and clear some system caches on boot — so occasionally simply booting into it and restarting resolves the issue.