Hi Jason,
All of your assumptions are correct. The main function of the first coat of primer in this application is to fill pin holes, help fill surface defects, fill the weave and to help create plate flatness. It also gives the finisher another look at the surface of the plane and gives another opportunity to continue block sanding.
for a lot of people this method is way over kill. I could of easily sanded the primer to a smooth and even base and been ready to shoot color basecoats - and for a lot of guys that would of been all that is needed and that would be fine.
The finish that I am trying to achieve will have and undistorted mirror like reflection off the gloss of the surface. go back a couple of pages and look at my examples of other finishes that I did. It's about that plate flatness, something that most paint jobs don't have. For most it's way over kill.
http://www.rcuniverse.com/forum/fb.asp?m=6882401 - examples of ultimate plate flatness on a wood plane
It's also a huge amount amount of time spent going to this extreme, again for the average builder maybe not worth it. I have been told that you could go straight to a white base coat at this step. But since i am so light I am going to shoot another coat of primer reduced to 50% and then finish sand it to a even coat of primer. I haven't weighed where I am at yet but I bet I haven't added 14 grams yet as I sanded almost all of the primer off.
the other reason is that I am planning to use multiple colors in my scheme and a 2 -stage clear...
I guess that is the reason for my obsession...... an attempt at perfection
I am just crazy like that - ask Mike !!!