Since this hasn't been replied to yet:
It really runs the gambit honestly. Some people DO do complete UI reworks all with LUA and photoshop, essentially coding their own addons to overwrite the blizz default. I believe that's what
LUI v3 is, for the most part.
Then some people are able to develop entire UI's from Weakauras like
this guy does (and his shit is amazing).
And then some UI's are no more than a tasteful combinations of various addons and tinkering with their settings to make them visually cohesive, much like
Caith UI
Finally some UI's are a combination of all of the above, some LUI coding, some external addon settings and photoshop, like
RealUI.
Anyone is free to correct me on these examples, but that's pretty much how it works. I used to spend up to 5hrs at a time developing my own UI before I just started using RealUI cause I don't got time for that anymore lol.