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There are many good reasons to settle a lawsuit. It feels like you're mixing up going to trial for a crime with one party suing another.
Most of the time in the US a lawsuit is seeking damages, so the primary goal of the suing party is to receive compensation. If the parties can agree on terms why go through with the lawsuit?
Sometimes the party that feels victimized does not want to testify and relive whatever trauma they suffered.
There are of course exceptions like when a lawsuit is filed for a symbolic amount like $1 or to get a civil verdict where a criminal one failed. Those are designed to either get a victory in the courtroom or compel someone to take an action unrelated to compensation.
Criminal trials are the state charging a company or an individual for a criminal offense. Those trials can end on a plea deal. It's a mechanism to avoid a hugely expensive trial and the risk of losing altogether. Of course as a the accused party you have much better chances of a deal if you have a great defense that makes the prosecutor unsure they will get the result they want. So it's inherently unfair to the poor.