Its not clear to me that LLMs hallucinating is because of they are extrapolating beyond their training data. Is that proven? Or are you extrapolating?

Even acknowledging it is interpolation, models can extrapolate slightly without making things up, within the range where the model still applies. Whos to say what this range is for an LLM operating in thousand dimensional space? As far as I can tell the main limiters to LLM creativity are guardrails we put in place for safety and usefulness.

And what exactly is your proof that human ingenuity is not just pattern matching. Im sure a hypothesis can be put that fire was discovered by just adding up all known facts the people of those times knew and stumbling on something that put it all together. Sounds like knowledge remix + slight extrapolating to me.