It means understanding that what God requires isn't an arbitrary set of steps that we must complete like some kind of initiation. Instead, knowing the fallen situation we are in, he tells us what we must do to get out of that situation; he offers his grace, his gift, to overcome the fall.
Perhaps that is why we use the phrase, "the great plan of happiness," more often today than the formerly more common phrase "the plan of salvation." We want to stress that our striving for happiness is fulfilled in the plan provided by the Father.
On this view, salvation is the result of a faithful life. It is life with the Father. And that life has a particular quality. It has the quality of his life, a quality that we aim for even in this world where it is impossible.
If we are faithful to God, then we strive to live a life that has the quality of his life, a life that he describes and urges with his commandments. But, to repeat, those commandments aren't the arbitrary fiat of a harsh ruler. They are instructions for the good life, both here and in the eternities.
One of Joseph Smith's revelations teaches that those who are blessed to live in Zion, the community striving to be the ideal kingdom of God on earth, "shall also be crowned with blessings from above, yea, and with commandments not a few" (D&C 59:4). Commandments are blessings, they are crowns that our Father gives us that will make us his kings and queens.
Just as our Heavenly Father doesn't give us arbitrary commandments, he doesn't punish us with arbitrary punishments. In fact, in a very real sense, he does not punish us at all. He does not respond to our sin by proving his power over us.
Rather, if we do not take the advice that God offers and we reject the grace that he gives in the offering of his Son, then we are condemned by our choices to live apart from him. Failure to be faithful to him means failure to become like him. Failure to accept the gift of salvation that he offers means failure to have that gift.
As Paul points out, the punishment of sin is that I am a person who does those things. Speaking of sinners, Paul does not say that the Father wrathfully condemns those who dare to defy his orders. He says that God's punishment is to allow sinners to be sinners (Rom. 1:28). Honoring our desires and choices, he allows us to be who we have become—though he has made it possible for us to be otherwise.
We may not have the faith needed at this very moment, but the divine promise is that we have what we need to receive that faith and for that faith to grow in us. The Book of Mormon teaches that we need no more than to desire to believe and to let that desire work in us (Alma 32:27; italics added). If we allow the seed of faith to be planted in our hearts, not resisting it (Alma 32:28), then we will discover that the seed, the word of the gospel, is good (Alma 32:30).
The tree that grows from that seed will "spring up to everlasting life," it will give us "the fruit which is most precious, which is sweet above all that is sweet," and we will "feast upon this fruit until we are filled" (Alma 32:41-42).
One of the first prophets to write in the Book of Mormon is Nephi. He shows his understanding of the gift of faith and the fruit of nourishing that faith in a prayer and a testimony:
O Lord, wilt thou encircle me around in the robe of thy righteousness! O Lord, wilt thou make a way for mine escape before mine enemies! Wilt thou make my path straight before me! Wilt thou not place a stumbling block in my way—but that thou wouldst clear my way before me, and hedge not up my way, but the ways of mine enemy. O Lord, I have trusted in thee, and I will trust in thee forever. I will not put my trust in the arm of flesh; for I know that cursed is he that putteth his trust in the arm of flesh. Yea, cursed is he that putteth his trust in man or maketh flesh his arm. Yea, I know that God will give liberally to him that asketh. Yea, my God will give me, if I ask not amiss; therefore I will lift up my voice unto thee; yea, I will cry unto thee, my God, the rock of my righteousness. Behold, my voice shall forever ascend up unto thee, my rock and mine everlasting God. Amen" (2 Nephi 4:33-35).
Nephi's prayer is our prayer: Father, encircle us in thy righteousness and keep us from our enemies; keep the path before us straight and clear. Nephi's trust ought to be our trust: I will not trust the arm of flesh because I know that God will be liberal with me regardless of the difficulties I now find myself in.
That prayer and testimony sum up what it means to be faithful.