Where exactly is the line between monitoring and observability?

Monitoring tells you that a problem exists; observability helps you understand why it exists.

The distinction is not about tooling — the same platform often does both — but about what the data allows you to ask. Monitoring data is pre-aggregated around questions chosen in advance, which is what makes it cheap and fast; observability data keeps enough context and correlation to support questions formed after the fact.

They are complements, not a replacement. You still want the alert that fires at 3 a.m. (monitoring); observability is what you use in the twenty minutes after it fires.