I have read a lot of controversy about C#, where some say it's interpreted, some say it's not. I do know it's compiled into the MSIL and then JITed when run, depending on the processor etc...but isn't it still interpreted in the way it needs a VM (.NET) to run?
The VM is an abstraction of a microprocessor. It is just a definition and does not really exist. I.e. you cannot run code on the VM; however, you can generate IL code for it. The advantage is that language compilers do not need to know details about different kinds of real processors. Since different .NET languages like C# or VB (and many more) produce IL, they are compatible on this level. This, together with other conventions like a common type system, allows you to use a DLL generated from VB code in a C# program, for instance.
The IL is compiled just in time on Windows when you run a .NET application and can also be compiled ahead of time in Mono and in .NET starting with .NET 8 (see: Native AOT deployment). In both cases, native machine code for the actual processor is generated. This fully compiled code is executed on the REAL microprocessor!
A different aspect is the number of compliers you have to write. If you have n languages and you want to run them on m processor architectures, you need n language-to-IL compliers + m IL-to-native-code compliers. Without this intermediate abstraction layer you would need to have n × m compliers and this can be a much higher number than just n + m!