That's exactly right. CSS is just used for your preparatory convenience. It all gets reinterpreted into the corresponding HTML when the Mobi is actually made.
The Mobipocket documentation's most useful applicable part is probably the list of supported HTML tags, which at least gives you an idea of what a given tag will do and how it ends up displaying, and what options you have for modifying the display (not many). At least you get a sense of what won't work, keeping in mind that Mobi is really based on some kind of modified version of the old HTML 3.2, IIRC.