Question about VPN and wifi extender

I'm using my laptop to create a hotspot and then connect my phone to it and use a VPN on my phone.

Is the data communicated from my phone to the router encrypted?

I'm asking this question because I assumed that because the laptop is in the middle, the information the laptop sends to the router is not encrypted.

I checked the IP address on my phone and it showed the location of the VPN which is good.

Will the ISP know which sites I'm visiting?

Thank you and sorry for the long post.