What is now used to back currency?

Nothing in most cases. The closest thing you have is that some countries have begged their currency to the US dollar, but ultimately for most currencies they don't have a physicial thing they are pegged for.

As for its value, it's "real world" applications as a metal/conductor can be easily done by other metals.

Well it's most important property is that it was easy to melt/forge coins from. In antiquity there were only 7 known metals.

But as for rare, sure... but aren't there a lot of rare things?

It's not just that it's rare. Other nice things it has is:

• It's divisible, so you can easily make whatever denominations you want.

• It's uniform, so one gold coin is equivalent to any other gold coin of the same size. (Unlike say diamonds where you have to factor in cut, clarity, etc.)

• It's relatively easy to transport.

• You can shape it into physical coins with the king's face on it.