4) what in the hell have I gotten myself into?
A steep learning curve!
The purple and green wires are for additional lighting functions, which the particular decoder may or may not operate -- you need to check the documentation for the individual decoder.
Regarding functions, typical decoders have basically two functions, motor control and lighting control. Some may control only lights, no motor. Some new ones may control only something like freight car sound. Others may have additional light functions beyond just direction and on/off -- like Mars light, rotary beacon, etc. This all depends on the product description and documentation.
There's only so much function you can get with an 8-pin plug, especially because only 7 of the 8 pins are actually used. A 9-pin decoder potentially gives you 9 pins for actual functions like Mars lights, etc. This is good on some locos like Walthers Proto 2000, MTH, etc, where the Mars lights, numberboards, etc, may be separately wired and separately controllable with a multi-function decoder.
A 9-pin decoder is also good because it's set up to only go in one way, the right way. It's possible to put an 8-pin decoder in backward, and if you do, you lose light control (ask me how I know).
This is just a start. Good luck!