Yes, your beastie GPS unit is a similar receiver with its internal antenna. The difference between this and a complete GPS receiver is that the complete one has its own display, which makes up a lot of the weight, and the complete one has all of its own software to manipulate the GPS position data into something useful to the user, like putting your spot on a map and scrolling the map. The incomplete receivers output a data stream of the current position, and that is all. They leave the software manipulation, maps, or whatever, for the rest of your system which is often a smart cell phone, iPad, or whatever. In many composite solutions like this, you end up with a battery inside this and a battery inside that and a battery inside something else. Nearly all of these small modules have their own internal patch antenna. Those will work OK for the average user, but they are not the sharpest tool in the shed.
I've dealt with maybe eight or nine thousand GPS receivers, each with an external antenna. It seems like the reason might be for greater sensitivity, but it isn't exactly. The typical signal strength hitting the earth's surface is good enough to be received adequately in 99% of all GPS receivers. Part of the problem is that maybe you don't want to have the antenna directly at the main receiver module. The typical example is inside a car. A typical driver can only focus his vision on a GPS display at a certain number of inches away from his eyeballs. If the display is sitting up high on the dashboard, then this doesn't work so good. If the antenna is up high on the dashboard, then the antenna can "look" straight up through the windshield and "see" the satellite signals. But if the display needs to be closer to the eyes of the driver, then the antenna and display need to be separated by a foot or two and then connected by some communication path which could be the actual GPS signals on a coaxial cable, the GPS position data on a data cable, the GPS position data on a bluetooth signal, or something equivalent. If you use the coaxial cable solution, then the GPS receiver feeds a tiny amount of DC power up the cable to power the low noise amplifier inside the antenna module, and then the amplified 1.57 GHz signal comes down the cable to the receiver. Each other solution has a different powering scheme. If you do not put the antenna in an optimal position, then maybe it will still work, and maybe not so good. If the antenna is directly underneath the metal roof of a typical car, it has to try to catch signals bouncing in through the glass windows, and this reduces accuracy or else halts dependable reception altogether. Yes, you get a little better sensitivity with an external antenna.
I've dealt with antennas that were up to 800 feet from the receiver. It's all good engineering fun.
When doing a winter climb one time, I put my GPS receiver inside my parka inner pocket to keep the display warm. Then I ran a coaxial cable up through the parka neck and into my hat. Between the inner and outer hats, I had an external antenna. This kept the antenna in a good position for reception, but it kept the receiver display in a good position for warmth and viewing. It aided my navigation in a white-out (this was on Mount Washington, NH).
I am one of those individuals who powers up his cell phone about once every three months. I use one complete Garmin receiver in my car, and I carry one tiny complete Garmin receiver on the backpack trail, despite seldom turning it on.