I'm totally and completely lost.
The underlying problem, d, seems to be you started working with an extremely professional — and thus complicated — piece of software, apparently unhindered by any former knowledge. Compare it to purchasing AutoCAD and then expecting to be able to design a nuclear power plant right from the start.
You are correct in your assesement that I cannot recall what's it like to know absolutely nothing, because I was never there. I grew up with word processors such as WordStar and WordPerfect, made a smooth transition to Word, PageMaker, and the odd stint of Quark XPress, and was happy to leave that all behind me faced with the awesome array of capabilities of InDesign. Still — the company I work for firmly believes in educating people, both interns and clients, and there is no level too low for us to teach something.
… If my steps are still too big, buy larger boots.
Let's tackle today's problems, shall we.
I followed all the directions (even though I had no idea whether to choose Character or Paragraph Style. I chose Character for the heck of it)
Why “for the heck of it”? That indicates you have no idea why you actually have two choices here.
“1. If your content is not already formatted, create and apply the paragraph style or character style for the text you want to appear in the header (such as a title or heading style).”
Your headers need to be marked with either a paragraph style or with a character style. Possibly both (which is unnecessary), but “I'm not using styles” is not an option here, would be the main point of this bullet point. Since I cannot look over your shoulder, I don't know if you are using styles, and if so, if your chapter headings are formatted using paragraph or character styles. Let's amuse ourselves, and assume you have done it right and used a paragraph style.
First, give this variable a good descriptive name, the default “Variable 1” is kinda opaque; something like 'chapter' springs into mind.
The next step is, still quite obvious, that you have to tell InDesign what style to choose. The other options (Use, Case, Punctuation) are For Other Uses and may best left at their default settings.
What have you got at this point? Well, nothing yet. The variable is “defined” but, just like a paragraph or character style, it doesn't “do” anything until you actually use it somewhere. So it's on to the next hurdle: the bewildering list of steps to make sure the variable “does” something.
1) Add what text?? If I put the title of Chapter One, that would put that title on all 384 pages, right? I've already added the page numbers before this. [..]
Any text you want. Hey, it's your Master Page, and you are its sole Master and Commander! If you want to have the text “doodlebugs rule” on each page, well, this would be the place & time to insert it. The title of Chapter One, well, sure, if you want to have that appear on each page — but obviously you do not, so why mention it?
[..] I have no idea how to add a variable.
Hm. It doesn't get mentioned on the Help page I pointed you to. Okay, you might recall how you got to the “Define Variables” dialog: Type menu -> Text Variables -> Define .. The other choice in that menu is “Insert Variable”, and it's important to note that a text variable is a sort of text; you can only insert it into a text frame. If you are not inside a text frame, the command is simply grayed out. If you do not have a text frame, draw one (preferably on the location where you want your header to appear).
Once inserted, apply any text formatting to the variable code. Remember, this is still a Master Page so the only text you will see is the variable name; but on “live” pages, the picked up paragraph style text will appear in the formatting that has been applied to the variable code.
2) How do I “Apply the master page”?
The Usual Way, through the Pages panel menu. See the Online Help if in doubt.
3) Additional Master pages??
It's unclear to me what is unclear to you here. Yes, you can create additional Master pages (lots and lots of them)? No, you don't Need To if you don't Want To? This point #3 is only there if you want more than a single style of header and/or footer. In particular, it has nothing to do with you having several chapters — the Text Variable is going to take care of that, as per its designated purpose.
Give it a shot and call me back in the morning, but make sure to have done your homework first.
