Shading and lighting models aim to make 3D objects appear realistic by simulating how light interacts with surfaces. The Phong lighting model approximates these interactions using components for ambient, diffuse, and specular reflection. It calculates the color and brightness at each point based on material properties, light sources, and the viewer's position. The modified Phong or Blinn model improves efficiency by using the halfway vector between the light and view directions for the specular calculation. Ray tracing provides a more physically accurate solution by simulating the paths of light in a scene.