Are day traders really just trading with each other and not necessarily long-term investors?

Some are selling to or buying from long-term investors.  It's not necessarily obvious whom.  But how much stock is owned by long-term investors and how much by day-traders is constantly changing, so some sales have to involve a sale of stock from day traders to long-term investors or from long-term investors to day-traders.

Exchange orders are  systemically transmitted to the floor of exchanges, while OTC orders are transmitted to known makers or firms who have an interest in a given security.   

Orders are not routed to individuals unless the firms route to their own floor broker. The real buyers' (as well as sellers') are never disclosed in order entry and/or execution.

Floor traders who usually assist market makers express their interest in securities at given prices to market makers/specialist, but they don't seek out other "day traders".  However, with years of experience traders know who to go to for certain securities but at the end of the day they'll trade with anyone who serves their interest.

In 2017, Aldridge and Krawciw estimated that in 2016 high frequency traders (HFT) on average initiated 10–40% of trading volume in equities,

Assuming that estimate is correct, HFT accounts for a substantial portion of the trading volume, so trades between HFT are common, but far from all trades.

There will be times when HFT account for the majority of trades in a particular stock.