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So, *in theory*....

Without power to the switch, the wiper stops immediately, regardless of position.



Correct

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In a normal functional powered switch, When you turn the wiper switch "off" it sends power down a wire to the wire motor to let it know to "park" the wiper arms?



Correct, the park switch is inside the motor. The blue wire runs from the switch to park switch terminal on the motor.

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And the park function is a contact that closes (or opens?) inside the wiper motor thats says, "Hey, we're in the park position!" and stops the arms from moving?



It's a simple internal switch, either on or off. When the park switch is on, there's power to the motor. When the park switch is off, there's no power to the motor.

I'm guessing you do not have an Electrical Service Manual for your car? PM me your address and I'll scan the pertinent 3-speed wiper pages from my '77 ESM and e-mail 'em to you if that'll help.