we have no idea what makes it do that

Isn't it the alignment of molecules in a material so that their electrical charges are all oriented in the same direction, thus attracting the opposite charged ions of other molecules in other objects towards the corresponding side of the magnet material? That's why magnetism only affects materials like iron where the molecules naturally form in a uniform orientation during it's transition from solid to liquid, and not other material that has a more random orientation.

I mean, I guess when you really boil it down, there may still be some question as to why positively charged ions are attracted to negatively charged ions in the first place. But then we're getting into quantum mechanics which is way deeper of an answer than a grade schooler would be looking for and so far down the rabbit hole that making a claim like "we dont know how magnets work" is only true in the technical sense. And by that, I mean it holds as much truth as "we don't know how anything works".