If you break any component down to the cost of the materials, everything is worth less than what you pay. Try arguing with your car mechanic about the cost of a repair based on the value of a replacement part. And what Apple is making on battery replacements is basically a rounding error compared to what they make every quarter, hardly a “mint”.
The cost of an Apple product also includes the designing of custom parts and being able to get hands-on help with the device at any Apple store for the life of the product, which is worth a considerable amount. Customer support is something that is incredibly overlooked with Apple products — I’ve made good use of it through their stores, their Twitter account, and also over the phone, as well as classes to get the most out of their apps — all without AppleCare. And for people who aren’t tech savvy, that peace of mind of having a place to go for help and instruction carries a high value that, as far as I know, no other company comes close to matching. Also AppleCare isn’t mandatory at all, and I’d wager that the majority of Apple users don’t get it, nor is it needed to have a good experience with an Apple product.
No one is trying to convince you to buy an Apple product, which are premium products with a premium price that offers a premium experience. But to say that “extra performance, features” aren’t “worth it” is completely subjective. Having a phone that is totally integrated with and syncs with my laptop, desktop, watch, etc., supports the latest software for years, holds its resale value better than Android phones, and isn’t constantly capturing my data to sell to whoever has the money carries a value for me and a lot of other people. If you’re happy with your Note 5 and feel that you get good performance for the money, great. Some people feel the same way about Apple products, and no one can say that either of you are wrong.