Yes, that is how the virtual queue works in theory. In reality,
Disneyland only had to use it for about 2 hours on day 1, and hasn't needed it since.
Essentially, you virtually join a "boarding group" via the app. You put your party size and the app tells you what "Boarding Group Number" you are in. You will receive a notification on your phone when your boarding group is ready to enter the land. You have, I think, 2 hours from that point to arrive in the land (in case you are in a ride queue, at a meal, etc). Once you enter the land (they will scan you in), you can stay as long as you want BUT once you leave the land, you will have to rejoin a boarding group (if available) to get back in later on.
The app will have a section where it will show the land status as either being Open or Join a Boarding Group. They will also have a section showing which boarding groups are currently able to enter.
Holding a reservation to Oga's Cantina , Savis Workshop, or the Droid Builfing experience gets you am automatic entry 1 hour prior to the time of your reservation.
At Disneyland, they have these digital boards up in a few locations that show the land status. When the virtual queue is being used, these signs show the boarding group numbers currently being admitted.