Okay, this is how i'm gonna say it.
Motion blur in games is an artificial creation of blur in order to create a certain effect or feel to the game, or to improve frame rate that can be toggled on and off, which is what you're referring to. It is an in-engine thing that strangely some people like.
While there may be no ghosting at 60Hz, at higher refresh rates games feel much smoother, you can see more and you can react much faster. Your eye is seeing more frames per second, as your monitor is now displaying a maximum of 120 frames per second as a pose to 60 on a standard LCD monitor. This makes the image crisper, clearer and smoother.
I hope this cleared it up a little bit, i've tried to simplify it but let me know if you're still confused.