You got it. The circuit is from battery power through the light and into the alternator, where it grounds through the rotating winding. It is the activation circuit and as the small field is rotated a set of diodes, normally called the trio diode or the excitation diodes, breaks out a larger current flow to the rotating field (through the regulator). At this time battery voltage is on both sides of the bulb filament and the light goes out.
Often in the field we have used a test light hooked to battery + to activate the alternator. Any small wattage 12v bulb wired in series from the battery will do the job. It would be prefered to have that circuit powered up by the ignition key.
Bosch Master, ASE Master, L1
33 years MB technician