Do more miners imply less reward? I'm trying to understand the following:

There is a limited amount of mining reward for every currency and a precise amount is rewarded for every block a person wins per time. Since most people mine in pools technically the more miners or rigs there are in the world the less money an individual makes? Is this really how this works and if so how can it stay "profitable"?
Yes. More miners -> Higher difficulty -> Less chance of finding a block with a given hashrate -> less reward.

Long-term, it will only remain profitable for those who are more efficient than others.