The Firefox browser UI is a web page (link only works on Firefox)
chrome://browser/content/browser.xhtml
It was rendered by Gecko, Firefox's browser engine which supported XUL besides HTML. XUL was animated using Javascript and styled with CSS.
XUL was also used in the media player Songbird, the mail client Thunderbird, the web editor NVU and probably other applications besides some browsers based on Gecko.
It was possible to run a XUL app by downloading the XUL runner, or just by telling Firefox to run it. Your chrome URL was actually something something browser.xul "back in the day".
XUL is deprecated. In (not so anymore) recent years, all the XUL has been replaced by pure HTML in Firefox. I don't know if there is still some XUL left, but it is vanishing if this is the case. So yes, now, Firefox's UI is written in HTML.
XUL could have been a great toolkit to write cross platform apps. It was easy to use and understand. There is a parallel world in which Electron apps don't exist, and desktop web apps are written in XUL. People would not have to re-invent their whole UI toolkit on top of HTML and React for each app they write.
It didn't happen in our universe. Mozilla probably wanted to focus on Firefox, and XUL was just some odd technology they had to maintain just for Firefox, and this maintenance was a burden and probably made Gecko, which main purpose is HTML rendering, too complicated.
In another parallel universe, Gecko is what powers their equivalent of Electron, or one of its alternatives. That hasn't happened in our universe neither, because Mozilla did not put effort into allowing to embed Gecko in other UI toolkits like Qt or GTK. I think it was possible for a short period before Gecko 2 or something like that. I have waited for this to happen for years. Still waiting. Instead, alternative browsers based on Gecko turned to WebKit, or vanished.
I have long wondered why Mozilla hasn't worked on a embeddable Gecko engine as an alternative to Electron. The Mozilla alternative could be promoted as a modular, cross-platform component but in a stripped-down, faster and less memory hungry form than Electron (assuming these features can be achieved).
The traction that Electron has gained as a cross-platform option for building apps is huge. It's only set to get bigger (whether for better or worse).
Imagine if Gecko was in this space competing with Electron. Imagine if thousands of developers place their trust in Mozilla because they have built their cross-platform apps using Gecko. They want to see Mozilla grow and succeed - they have a stake in seeing Gecko development continue. As you lament, it is probably too late (or too unrealistic) for this to happen.
As you say, a very long time ago, Mozilla did have the option to embed Gecko into apps. It was never well-documented and what documentation existed was outdated and lacking in any helpful details.
I remember doing this on an old version because the font size in the tabs was off and it couldn't be adjusted from the settings.