No, I don't think most people settle - and I think it's important to underline the message that you don't have to settle and settling isn't normal. A lot of women screw themselves because they internalise "received wisdom" that everyone settles, all men are shit etc, so they think they have to as well.
Settling doesn't just fuck yourself over - it's a supremely selfish act in that it fucks over your partner as well. Being told DP had settled for me would devastate me more than anything else, I think. A thousand times worse than infidelity. The entire relationship would have been a lie.
And to be clear, because a lot of people are getting it wrong on this thread. Settling is NOT having a partner who isn't perfect. Settling is NOT putting up with and accepting minor human flaws in each other. Settling is NOT the natural transition from initial passionate romance to a more stable love.
Settling is resigning yourself to a lifetime with someone you know you're not compatible with, for reasons that have nothing to do with them: you're scared of being alone, so he could be any placeholder man. You want kids, so he could be any placeholder man who seems vaguely sensible. You want a fancy life (and can't earn the money yourself), so he could be any placeholder decent-earning man. None of it is about loving or even liking him, it's about your own fears (see above re: selfishness).
The really basic fundamentals for being in a relationship are to enjoy someone's company and to be attracted to them, and to be compatible in terms of living together, sexuality, ethics and so on. In real life most people I know would never have settled for less than that, and the process of dating was to find someone who ticked all their key compatibility boxes.
On MN you see an alarming number of women who found men who ticked none of those boxes, but married them and had kids with them anyway. But I don't think that's commonplace elsewhere.