Connection between twig template and website content
Yes, I think what you're saying is completely correct.

Settings > Sections > Homepage > Edit entry type

The "layout" here is only meant for the back end. This is just how you assign fields you want entries in that section to use and what it will look like for admins to create and edit entries.

Settings > Sections > Homepage

Will show you what template is being called when there's a match for that URI.

In the file system, your template files will be located in either /craft/templates if you're using Craft 2, or just templates if your using Craft 3. It's probably worth noting that these directories are usually above the web root.

For example:

.
├── craft
├── templates
└── web &lt;-- web root
    └── index.php


If you're afraid of breaking things on a live site, you could create a duplicate of the site and run it locally or on another server. That's a great way to sandbox changes and play with things to see what effect they have.

Another great way to learn how Craft works is to try out the "Happy Lager" demo site. It's a pretty simple Craft site and well organized. I've see live production sites that are incredibly complex or over-engineered. I can't imagine trying to learn Craft with one of those as my only example.