Yep, that's about it apple.
The way I think about it is that the rectangle shows the area that, when your nav system tells you that you are over the waypoint, the geeks have calculated that there is a 95% probability of being inside of that box. Protection areas ('1/2 A/W' value), based on a formula and listed in PANS-OPS (example below), are then applied either side of the nominal track with the first half of the protection on each side given full protection for the segment and then decreasing from full protection to zero on the outer edge. Ignoring 'mountainous terrain', full protection for initial approach segment is 300m (984ft), intermediate approach segment is 150m (492ft) and final approach segment is 75m (246ft).
Cheers
TeeS