Herein lies the problem... if you only shoot in jpg (jpg is 8bit only) then you are capturing far less data than if you were to shoot in RAW. Far less. So. When does this matter? It mattersif you need to do any edits that affect the colors/tones of the image. This includes exposure tweaks (curves, levels, etc.). If you start with 16 bit (RAW, TIFF, etc) you have way more tones than the human eye can even see. So sliding around these tones means you are pulling data around from a large bucket of nearly endless colors and tones. So when you get everything exactly where you need them to be you can afford to trash a lot of the data since it can't be seen or printed anyway.
But, if you start with very little data and drag it around, if you gain a tone in one area, lets say by brightening things up with levels, then you lose a tone from somewhere else. Nothing is going to 'backfill' into the areas left vacant by you moving things around. With 16 bit when you move things around there is plenty of data to 'backfill' into the areas to give you plenty of tones and details.
So hopefully you can see that once everything is tweaked right where you need it, it then does not matter much if it is 16 or 8 bit, jpg or tiff. But you always want to hang onto the RAW files so you can go back and re-process it with 100% of the data if you think it might need it.
Hmmm, let's try and clarify... lets say in 8bit/jpg you are capable of capturing 256 shades of data. But let's say you underexposed by one stop. This may mena you are missing up to 125 shades of tonality. So when you use levels to brighten things up those 125 shades of missing tonality simply get disperesed throughout the image. You are still missing that many tones, just averaged out over the whole tone range.
But underexpose with 16 bit and now when you slide levels to fill in the highlights there are plenty of tones to fill in all the tones across the image. But once everything looks good and you convert to 8bit, you still have all those tones in the 256 tonal range.
....I'm probably making thins more muddy, aren't I?