Confused out of my brain re: Upfront page templates and layout

I am soooooo confused. I thought this would be simple but it's just confusing.

What is the difference between a template and a layout?
I want to have all my pages look the same. I want to have all the same as the home page when I create a new page. And edit each on individually.

My understanding was when you make a custom template and you make a new page, this template is then used on the new page. But, this is not happening.