Yes you are understanding everything correctly and hopefully someone will explain the rear low/high speed better as well. The GG manual is an absolute joke and uses many outdated pictures and no clear info on suspension clicker setting or explanations of what they really do. They should be ashamed passing that thing off as an owners manual.
.....and I'm not gonna touch that last comment
Why doesn't GG (Marzocchi/Sachs) provide nice rubber covers for the bottom of the forks to protect the damping adjuster from dirt and mud? Seems to be asking for trouble IMO.