Both Hispanic and Latino are used for the same reason we say Asian, White, or Black. Somehow we have the idea that there are large groups of people who have such great similarities to each other that they should be given a label.
Some people know that someone from Italy has a background different from someone for Sweden. Thus, they believe that people of European origin have more in common with each other than they do with Asians. I doubt the usefulness of these broad geographic based labels -- they are basically geography -- Black = Africa. Hispanic means South of US-Mexico border and speak Spanish.
The GOP sounds more prejudiced as they are less likely to know that Marco Rubio as a Cubano is not identical to Xavier Becerra whose mother hails from Jalisco. Thus, they say stupid things like Hispanics in California would vote for GOP Rubio. Showing ignorance of the intra-group differences does indicate a lack of familiarity, and if one is a politician, that type of ignorance is not acceptable. Just as a politician in the N/E should know the difference between a Christian Greene from England and a Jewish Greene from Poland, a California politico should distinguish a Californio Pico from a Guatemalan Ramirez.