It isn't so much that you can and can't do certain alterations in certain grades of listed property but whether those alterations would (in planning speak) 'harm the significance of the heritage asset'. The whole building is listed, not just the exterior and a feature of the building is still protected even if it isn't specifically mentioned on the list description. Some list descriptions, mainly from the 70s and 80s, are only a couple of lines long.
Grade I listed buildings are the most significant heritage assets. They are of exceptional interest and sometimes international importance. Consequently, they are often little altered from their original state and are far more sensitive to any alterations - those alterations are much more likely to impact on its historic interest. Consequently, the likelihood of being allowed to carry out alterations is much less. You may well be able to paint your front door though, if the building is in, for eg: a row of Bath terraces where all the front doors are different colours. No impact on its significance, if it has a red door rather than a blue one, next doors is yellow and the other side is green. You wouldn't be able to replace that door with a plastic one though.
There is a house near me (which I covet, but it is in the £1m bracket, so never going to happen) which was designed inside and out by a prominent local architect for him to live in himself. The interior is intact. You couldn't fart in there without an application for listed building consent and someone who bought it would have to be absolutely sure that they could live with that decor for all time, as they could only repair it, not change it.
OTOH, Grade II listed buildings are less significant. They are of more than local importance but can sometimes be significantly altered from their original state. Most listed houses which are lived in are Grade II. You may have, for example, a cottage which has retained its thatch, rural vernacular appearance, windows, etc, etc but which has been knocked about inside. You could pretty much do what you wanted inside then but would need to leave the outside alone.
A few listed buildings are listed pretty much only for their interior - these aren't often dwellings, but if they were, the opposite would apply, free reign on the outside, limited to what you could do internally.