Joe, I think that is basically correct. ASA has been experimenting with a similar ball for a few years now and those are the kind of results they've been getting.
The compression rating is a good indicator of the "harndess" of the ball. This rating is the amount of force required to compress the ball a given amount. The harder the ball, the higher the compression rating.
The coefficient of restitution (COR) is a measurement of the "bounciness" of the ball. It is a ratio of how far a ball bounces back when fired from a given distance (eg: if the ball is fired 10 feet and bounces back 5 feet, the COR is 50%, or .50. The higher the number, the bouncier the ball.
The term "severity index" is a new one for me, but it's easy to see how a test could be constructed to measure it. The ASA testing showed that this newer ball produced impacts (measured in pounds per square inch, or PSI) less than that required to break bone (if I recall correctly, 1500 PSI). The older ball, when traveling at the same speed, produced impacts in excess of the bone-breaking limit.
The less-hard and bouncier ball somewhat negates the trampoline effect of today's hotter bats. When the ball "gives" on impact, the forces of the bat/ball collision are deadened and batted ball exit speeds are reduced.