If I exercise more guess what - I get more hungry
well yes, obviously. But that's where the "eat less" bit comes in - you don't just think "hey I'm hungry so I'll eat whatever I like."
When you exercise regularly, your body soon adapts, so you can push yourself harder and not get as hungry with it.
For example, when I first started c25k I was so unused to doing even light exercise that I'd be ravenous after each session. And was very tempted to eat more.
Now I run a lot more, my body has adapted so the tipping point into that post-exercise hunger (aka runger!) is about a 20 mile run. But over that run I'll burn off about 2,000 calories, so even if I scoff a chocolate bar or even two, I'm still well in defecit.
Most days I run 5-10 miles without any "extra" food, which is how I'm thin now, whereas I was overweight when I did no exercise at all.
The other benefit of exercise of course is that when you're exercising a lot, you don't want to eat crap food the night before as you know it'll make you feel rubbish. So I've gone from having takeaways at least once a week when I was overweight, to never having them now, as I know a big fatty meal could ruin my training.
Exercise isn't just about the calories you burn in each session, it's about the lifestyle shift it brings over time.