When we breath, we use the oxygen, but we do not use the nitrogen. The nitrogen can actually be replaced with another inert gas and the “air” is breathable. Thinking about diving specifically, nitrox is actually an oxygen rich (nitrogen poor) mixture. More extreme mixtures use helium in place of some nitrogen (and sometime oxygen depending on the depth).
In your body, the amount of oxygen in our blood is critical for survival. Having a lot of nitrogen is actually not good. Too much is what causes the “bends”, again related to diving.
When looking at exoplanet atmospheres, we look for oxygen rich because it likely indicates water. We believe that planets with a high amount of water are more likely to support life similar to ours. It is possible that another form of life exists that doesn’t need oxygen or water, but we know for certain that oxygen and water can support life.