Confused regarding the interpretation of A in the least squares formula A^T A = A^T b So I'm was watching gilbert strang's lecture to refresh my memory on least squares, and there's something that's confusing me (timestamp included).
In the 2D case he has $A=[1,1;1,2;1,3]$. In the lecture he talks about how A is a subspace in our n dimesional (in this case n=2) space. 
If you look at the top left point of the chalk board in that time stamp you will see he has written down $A=[a_{1},a_{2}]$. Here he was talking about the 3d case, and the $a$s were vectors that spanned a plane onto which we wanted to project.
My problem is, I'm not quite sure how I'm supposed to understand the values for the 2D. Clearly the 2nd column is the x values, but can one say they span a space? The first one is obviously just the constant for our linear equation but how could one interpret that in the context of A spanning the subspace of our 2D world?
Basically I find there's a contradiction between how he views 2D and how he looks at higher dimensions. I don't see how it makes sense for A to be made out of two vectors as columns in 3D and for A to be made out of 2 different columns in 2D.

You have an $n\times 2$ matrix:
$$
A = \begin{bmatrix}
1 & a_1 \\ 1 & a_2 \\ 1 & a_3 \\ \vdots & \vdots \\ 1 & a_n
\end{bmatrix}
$$
The two columns span a $2$-dimensional subspace of an $n$-dimensional space.  Your scatterplot is $\{(a_i,b_i) : i = 1,\ldots, n\}$; it is a set of $n$ points in a $2$-dimensional space.  The least-squares estimates $\hat x_1$ and $\hat x_2$ are those that minimize the sum of squares of residuals:
$$
\sum_{i=1}^n (\hat x_1 + \hat x_2 a_i - b_i)^2.
$$
The vector of "fitted values" has entries $\hat b_i = \hat x_1 + \hat x_2 a_i$ for $i=1,\ldots,n$.
The vector $\hat{\vec b}$ of fitted values is the orthogonal projection of $\vec b$ onto the column space of the matrix $A$.
