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Very well explained Khara, especially for those who are new to this. You clearly have given it a lot of thought. Personally I prefer to explain the difference between screens that use pixels and printers that use dots (a lot more per inch), but maybe your camparison with water is better to understand for people who are not interested in technical stuff.
As for the question of how big your image should be for a magazine (or something else), I have another tip: create a new document in Photoshop and at the preset details, enter the desired dimensions (in inches or mm) and a resolution of 300 ppi*. Then change the unit of measurement to pixels via the drop down menu and Photoshop will do the math for you and you will see how many pixels wide and high the image should be.
* With 300 ppi you will always have enough. For large posters 150 ppi may be enough and for large banners (that will be viewed from a distance) 72 ppi is often enough. But in that case it is indeed best to ask your printer first!