Relating Refresh ratio to shuttering/ Frame rate is a common mistake fron the old days of CRTs.
Now is a diferent thing.The higer the bandwith the more things the monitor electronics will be able to do more fancy things
Is like saying 1080i is a interlaced while 1080p is not. Except from the early and very rare HD CRTs NONE of the LCD/Plasmas interlace.They all are progresive and display at his internal native resolution
But 1080i standard have lower banwidth than 1080p that is used in Higher resolutions, faster refreshes, subfield enancements,etc.
Let´s say you have a card then can run a game at 75 FPS. It´s whorthy ?
Depends on your monitor a 1080i can not display the frames as fast as they are rendered. A 1080P monitor can EVEN IF RUN THE SAME NATIVE RESOLUTION.
The same principle applies to 120HZ displays except that is more complex because you use the extra bandwith to more fancy stuf like, more bits per color, alternate frame display, Extrahiger resolutions, several motions subfield compensators and of course display 3D.
SO getting back to the question
Do human eyes gets this difference?
Shure i can see the difference bewteen 3D and 2D blue rays.More colors on screen? I think so but mostly depends on your age. Statics displays look rock solid to me even@50hz.Unshure for people who works all the day in the computer.
A 120Hz will show 120 FPS ?
Probably they could if matched with a fast card but is more likely they will be used smarter than that after all at 120hz you can send 1 frame but also can send 2 for alternate display that will be view as @60hz but is NOT, is sended at 120hz. Or add more detailed gradient colors using more bits per color. That will be view as @75hz but is NOT, is sended at 120hz.
In short 120hz MAY display 120 FPS but not necesarely, in fact is almost never used that way but yes the difference can be percibed by my tired eyes.