> why is it that fabrics can be made in a square shape but not e.g. a capless cylinder shape?

Woven fabrics are naturally rectangular because they're made of a 2D grid of fibers at 90° angles to each other. The easiest (cheapest) way to make an irregular shape out of a woven fabric is to make a rectangle and cut it down.

> I can knit clothes seamlessly, right?

Knit garments usually have some amount of seaming, but yes, you have a lot of options to make irregular shapes when knitting.

However, knitting machines tend be most efficient and making rectangular fabric. They can do some amount of shaping, but the labor and cost goes up.

If you want to hand knit a garment, you can make quite complex irregular shapes with very little or no need for seaming. However, you're talking about two orders of magnitude more labor to make a garment. Few people want to pay $1,000 for a hand-knit sweater, so you're mostly limited to knitting it yourself or having a friend or loved one who likes you.