As others have already stated, the points that you buy can only be used to secure your accomodations. Now, a nice "benefit" is that you are free to add any of the dining plans to your reservation WITHOUT buying tickets. You pay the same price for the dining plan as those who buy it as part of a package without the obligation to buy passes. This means that you can get your park tickets from a discount broker (try
undercovertourist.com) or you can skip the parks altogether and still take advantage of the dining plan. You must purchase the plan for all people on the reservation and for every night of the reservation. Note that when Disney offers "free dining", that is NOT applicable to DVC reservations. "Free dining" is added to a room/ticket package that is bought at full rack rate. Since a DVC reservation is booked on points, it is not part of a package, and therefore not eligible for "free dining".
When you use your points, you are entitled to all of the benefits of any other resort guest. You have access to EMH, you can use DME and you can make charges to your room. One big difference (for some people) is that when you stay on points, you do not get housekeeping on a daily basis. You get a "trash and towel" service on your fouth day and a full-cleaning if you stay 8 or more days.
In reality, DVC only saves you money on your room, and how much it saves you is entirely dependent on what you would have stayed in had you paid cash. If you plan on vacationing at Disney for the next 10-20 years and staying in at least a moderate resort, you should see some savings.
You have definitely come to the right place to get your questions answered.