You are correct in your assumptions. The short story is: at the moment DNN does not support content localization at all. The only localization that is going on is done by way of resource files, and the only thing that gets localized is the user interface.
Although it is simple to create a simple module that supports content localization (like my MLHTML module), it is a far greater project to come up with a content localization API that can be plugged in to by modules. Also.. content localization impacts many parts of the application. As you may notice, my modules support DNN search, but you will be presented by all results of all languages. Module settings would need to be looked at as well, als page settings. The scope of content localization is very large, which is why there isn't a solution yet.
Don't worry though.. content localization is very important to us.. we will not abondon it