The intuition for cuts presumably comes from the standard experience of approximation by terminating decimals. For example, we can approximate $\sqrt{2}$ by the sequence $1,1.4,1.41,1.414,1.4142, \dots$. Now, why a cut set for $\sqrt{2}$ requires "all" rationals less than $\sqrt{2}$. Intuitively, only these rationals $1,1.4,1.41,1.414,1.4142, \dots$ uniquely identifies $\sqrt{2}$. Are not they sufficient ?
Related question : Why the addition of two cut set is defined as the set of all possible summation of elements of the two cutsets ?
The answer to your question is somewhat complicated - the successive decimal approximations define a number whose square is $2$ in a context in which every increasing sequence which is bounded above has a limit.
There is a good discussion here, and more related topics here.
But there is a bigger issue. The square root of $2$ can be taken to be the limit of many different sequences of rational numbers (try working in base $9$ or $11$ instead of base $10$ for starters). If we take sections of "all" the rationals, it becomes easier to work with real numbers because we don't have to keep proving that two representations are equivalent (eg for the purposes of multiplying numbers).