You have it pretty much as I how figure it works. But I will add my 2 cents
The gasoline vapourizes as it enters the carb venturi. The oil on the other hand does not vapourize and proceeds into the manifold and crackcase as a mist, depositing itself on the internals of the crankcase. Various means are used to channel the oil to various bearings on the crank, connecting rods and piston pin. Some oil is carried initially into the combustion chamber, but in eventually all the oil in the fuel mixture does make it thru the combustion chamber and out the exhaust, some burnt, some unburnt. Almost all engines pump oil from the lower main bearing up to the upper main bearings through a recirculation system. Older engine had a purge(check) valve to remove puddled oil from the crankcase, dumping it into the exhaust housing, in the late 60s early 70s all US outboard did away with it and refined the recirc system to handle the excess oil. The 50:1 mix helped in that respect.
In all fairness, the engines that were speced for 50:1, and a few others could survive quite well on 100:1, but there would have to been perfect measuring, and mixing of the fuel(something that happens less than most people admit). OMC did do that with a number of premix engines in the mid 80s, but found out there wasn't enough oil left on the crank/rod bearings to prevent corrosion from happening if the engine was not run frequently
Race engines, even modern ones, maybe especially modern ones were speced with richer oil to gas ratio. The reason there is the racing engine turning higher than normal rpms would be starved of oil for too long if the throttles were slammed shut at these rpms, so an oil rich mix offers a cushion