MOSTLY correct, BUT not about the color depth. More color depth means you have more detailed information about the color of each pixel. (That's probably why they call it "depth" -- it is like a third dimension.) So, if one format has 8-bit color, and another has 16-bit color, the second format has more information. Converting from 16-bit to 8-bit would be losing some information. (If you reduce the color depth all the way down to 1-bit, you would have a "binary image," basically a black & white image.)

An image with 50x100 pixels (5000 pixels total) is like a swimming pool that is 100 feet long and 50 feet wide (so its surface area is 5000 square feet).

The volume of water in the pool also depends on the depth of the water.