Ok, I figured it out. In the list style setup, the character style is the font, color, and size of the bullet. The text continues in the paragraph and character style in effect when the list feature is turned on.
I was also wrong about the indent for lists being absolute to the page. They are relative to the "start" margin of the paragraph style in effect.
If your symbol position is at 0, it will appear at the start margin plus zero.
In a list style, the character style is the font the bullets come from.
The margin is the inward step for each succeeding level.
Indent is how far the first bullet is indented from the current paragraph style's start margin. The start margin in a paragraph style is where lines start, end is where they end, and indent is where the first line's margin goes.
The symbol position is where the bullet goes. If you set the symbol position greater than your indent, then the bullet will be parked on top of your text. Generally, you don't want to do that. Mellel salutes and runs up the hill if you tell it to.
Particularly now that I've got that under my belt, I have to say this is how I think lists should work.
When you want the paragraph style to change, you select a new paragraph style (or you let the next style setting progress from one style to the next).
When you want a list, you turn on a list style, either one provided by Mellel or go rogue - delete Mellel's styles and create your own. Turning on the list feature does not change the paragraph style. That means every paragraph style can support lists.
If you want to change paragraph style and turn on list styles, then you do have to two operations.
I'm un-bugged for this reason.
If list features were in the paragraph style, then it's likely that list-enabled paragraph styles would have non-list-enabled matching paragraph styles. If you wanted to change the indent in one, you would have to remember to change the indent in the other.
While that might not be too much of an inconvenience, I like the way Mellel features don't have side effects. If I change the margins in my body style, it doesn't affect list indentation. Like changing the margins of a page reflows the paragraphs, paragraph margins are what lists work with.
If you want to see styles in a train wreck, check out Affinity Publisher. I like AP. I use it for my alter-ego's midnight pamphleteering. It's great. It sucks at being a word processor, which is ok since it's not a word processor. It's also clumsy with styles, and that's less ok. I can get the job done, but, ewww.
It's not clean like Mellel.
As Mellel says, Mellel isn't for everyone. As The Grateful Dead once meant to say in their philosophical work, Truckin', "Livin' on Outlook, Clippy and Word and Excel, all a friend can say is ain't it a shame."
The Grateful Dead were wise. So, so wise.