The black line for the composition of the liquid just goes from one corner to the other. The red curve (left axis) shows the fraction of ethanol in vapor in dependence of the fraction of ethanol in liquid. For small concentrations of ethanol in the liquid, the concentration of ethanol in the vapor is higher than that in the liquid. But the lines pinch together at higher concentrations. Multiple distillations to purify ethanol work extremely well until the lines pinch. The lines intersect at the azeotrope and are so close together from there on up that the gap can hardly be seen.
The composition of the azeotrope changes with pressure, and distillation at a different pressure is one way to get above the azeotrope. Another is to add another organic liquid such as benzene to completely alter the liquid-vapor behavior. In any event, the pinching of the lines causes distillation to switch from a great process for starting the recovery of ethanol to a poor process for finishing the job. Vapor-phase drying has become a practical alternative for getting past the azeotrope.
Modern distillation technology saves heat energy by using the vapor from one stage to heat another. The enthalpy of the vapor is fine, but its temperature is too low to provide much driving force for heat transfer. There can be stages at different pressures to change boiling points to get more driving force, but a better solution is to compress the vapor. This causes some liquid to condense but at a higher temperature and thus creates more driving force.