Yes that's it, In fact, I always vaporize in position 3 with the mouthpiece, which is just perfect, and yes (and there's nothing stupid about that question - quite the contrary), the glass covers all the wood inside (and it's really sturdy, it's already fallen to the ground several times and never broken).
However, if you want to add glass beads (honestly, compared to the standard wood MP, I don't think it's worth the trouble), you'll need to insert the glass stem less, so you'll have wood in the air path, simply add a screen to the rim of the glass stem and add your beads as you would a standard MP.
On this model, if you add glass beads, the beads will hold the herb chamber in place, as there are no edge like on the wooden MP to block the herb chamber (this is normally blocked by the edge of the glass stem). To be honest, I've never tried the glass MP with beads, as it cools very well already and it's a pleasure to use like this.