They try to stagger the crowds. The return time will depend on how many people have gotten fast passes before you, but yes, thats the basic idea. Ive heard some people say that you can come back ANY time after the return time listed on the fast pass, up until park closing.
Yes - that is the basic gist of it. Also keep in mind once you get a fast pass you may not get another one for a while. So if you fast pass Buzz Lightyear @ 10a for example, you won't be able to get another fast pass until something like 11am. Not sure how they determine that time? It will be printed on the pass.
When we were there last Sept. we actaully had a CM announce on Carousel of Progress that fast passes were pretty much accepted any time after their start time. So a fast pass for 1p - 2p would be good even @ 6p that day for example. You couldn't use them the next day however. We actually saved up some Buzz passes & rode several times in a row later that day.
Of course Sept. is dead crowd-wise, my hunch is during peak times they aren't that lenient.