Why do we use redsocks+iptables instead of using iptables only?

Because “all traffic” does not speak the SOCKS protocol. A SOCKS proxy expects its clients to speak SOCKS. That’s where redsocks comes in: It terminates TCP connections and speaks SOCKS “on the other end”.

SOCKS is also a TCP-based protocol. When a SOCKS client connects, the following happens:

1. TCP handshake (SYN →, SYN-ACK ←, ACK →)
2. Client sends a SOCKS connection request (as described on Wikipedia)
3. Server sends SOCKS response
4. (If successful thus far) Data exchange with actual target takes places (eg. sending an HTTP request)

If you just redirect whatever to the SOCKS proxy, this exchange will fail at step 2: The server will receive what it perceives to be garbage data (eg. the HTTP request that is supposed to come only in step 4) and terminate the connection.