Baffled by Divine Mercy Sunday

I am totally confused by Divine Mercy Sunday tomorrow.  According to my googling (which began, but did not end on Wikipedia) this Catholic feast was established on the basis of visions by St. Faustina.  On this Sunday, Catholics are asked to attend confession that day, before they go to Mass, parishes are asked to display the image above (or a similar design) during services, and, as a result of these practices, those Catholics who go to confession and receive the Eucharist that day will receive a plenary indulgence.

The whole thing leaves me much more puzzled than most of the ritual and theology I’ve been exposed to.  First of all, I apparently have completely misunderstood what indulgences are.  As far as I can tell by googling, when a priest forgives sin in confession, he saves that person from Hell, but, in addition to the assigned penance, more penance must be done after death in Purgatory.  A plenary indulgence wipes out penances someone has racked up to serve in Purgatory to date.  Can someone confirm in the comments if this is correct?

Thus, I take it that, while someone who died after being confessed on an ordinary day could be assumed to not be in Hell, someone who died on Divine Mercy Sunday after receiving confession and communion could be assumed to be in heaven?  Again, this technical kind of rule strikes me as extremely weird.  If the point of Purgatory is to continue to burn off the dross of humanity to become fully Christ-like, it doesn’t seem like Divine Mercy Sunday would actually accomplish this, or, if it did, you’d see a lot more saints walking out of Mass that day.  Surely so profound a transformation would have some noticeable effect!

I’d love to hear explanations of the theology underlying the feast or some details about how the Church decided the visions were licit (St. Faustina’s writings were on the banned books index for a while).

My read (as someone outside the Church) is that this (and a lot of theology of the afterlife) sounds like scriptural fanfiction.  It sounds like the embroideries and encyclopedic extensions of a canon that I’m most accustomed to seeing in Harry Potter forums.  It’s not that the new story can’t be harmonized with the established facts, but the whole thing seems superfluous and speculative.

Obviously, I’m working on limited data, so I’m open for correction in the comments.