I just re-read my last post and if I came on too strong, I apologize. Perhaps I should change my handle to Grumpy Doc... Essentially it is this, All Digital devices made today contain a very large number of small devices in them, These devices, when operating pull little bits of current from the 5V source, they are Very FAST pulses AND for reasons that are too difficult to explain it is difficult if not impossible to 'see' them with an oscilloscope... A capacitor can be thought of as a small reservoir of current. When the device is working the small reservoir helps out by supplying the device with a little extra CURRENT when the pulse, (called a 'switching pulse) occurs locally (at the device) and this little help, again the small reservoir takes up the slack represented by the small loss in the 'wires' (PCB Traces) and 'helps' the device and all the others to work more efficiently by "smoothing out" the current pulses drawn by the device in question... Better? I do Hope this helps... But Bypassing is a complex subject, Very Complex.
Doc