Total Confusion! Steinberg Soft-eLicenser vs. USB-eLicenser

Because I suffer from buyer's remorse at times, I'm here to rant a little bit and seek confirmation on Steinberg's convoluted process of the eLicenser system.  At this time, I still don't know what is truly necessary for protecting licenses using this system...but I *think* I have a general understanding.
 
OK, story time!  Back in 2013, I got a good deal and purchased Waldorf Largo from an online vendor who sent me an actual disc.  I installed and activated Largo.  The license was stored locally, on the computer, in the Soft-eLicenser (SeL) program.  Fast forward to a few weeks ago, and my computer developed problems.  The inevitable re-installation of Windows needed to be performed.  After the installation, and subsequent installation of Largo, I go to activate it and no dice; license already used.  I contact Waldorf, and the support person states that I need to purchase another license. (Insert soiling-pants sound effect now).  Fortunately, after proof of purchase, I am given a coupon code for a new Largo license which costs an appreciated $12.59.  I figured another 12 bucks instead of a dead-in-the-water-loss of the initial purchase price was the smart choice.
 
Because I didn't want to fall into the trap of lost licenses again, over this past weekend I bought a USB-eLicenser (dongle) from Guitar Center, which cost $24.99.  Not too bad of a price; certainly cheaper than iLok (which is not compatible with anything eLicenser).  In order to protect my license from future trouble, I immediately transfer the Largo license from the Soft-eLicenser to the USB-eLicenser.  All goes well.  I breathe a sigh of relief, though I'm now caught in the dongle game!  No worries though at this point.  So then, I register the dongle with Steinberg.  I create an account, and it automatically populates and registers the dongle with my "mySteinberg" account.  And then I read this on one of the Steinberg pages:
 
"A Soft-eLicenser (SeL) is a virtual copy protection container that holds the licenses needed to run your Soft-eLicenser based products. By registering a Soft-eLicenser number, all product licenses contained in it are automatically added to your user account."
 
Huh? Now, I understand the dongle essentially does two things: 1) stores and protects my licenses regardless of what the Soft-eLicenser does, 2) allows me to move and use software(s) between multiple computers.  But considering the above statement from Steinberg, was the USB dongle an unnecessary purchase?  My biggest question at this point is: does a registered Soft-eLincenser account act similarly to the "cloud based storage" that Waves uses?
 
Overall, I am thinking "no" because if I ever need to reformat/reinstall Windows again, then the Soft-eLicenser would be "new" and the old ID number of said licenser would therefore be voided, i.e. the computer has changed and is not the same.  even though it was registered prior, I would venture to guess that it would still be voided and therefore any licenses stored on the Soft-eLicenser would be lost permanently.  The issue remains regardless of registration, right?
 
So the USB-eLincenser, it seems, is a absolutely necessary evil if one wishes to protect their software.  One shouldn't be duped in thinking that the Soft-eLicenser (and the mySteinberg website/account) is a safe way to store licenses, nor think it performs like a "license cloud."  Am I correct in this statement?  It seems that the only benefit of registering the USB dongle with the mySteinberg account is to have the ability to recover any licenses stored on the device if the dongle becomes defective, broken, or stolen (where I imagine the latter would result in Steinberg deactivating the licenses).
 
What a round-about way of learning the system!  One should always keep in mind that the true cost of ownership may not be what it seems with any Steinberg product, or a product that uses Steinberg's eLicenser system especially if it does not come with a USB dongle.  I imagine it is the same grief for iLok.

I have Wave Lab elements 7 and Cubase LE 
 
I soon learned that you had to go on line and un register them before moving the software.  I always forget. But they have always politely e mailed me new activation everytime I asked. It's odd you had to pay?  I would always say my Hard drive failed so I had no option to un register. I think I've gone through this 5 times with them by now. 
 
But I just went through a mucking about period where I was swapping out C drives like crazy and I figured they might loose patience with me, I also hated the registration process as it was very time consuming. So I bought the USB licencer and I'm glad I did. What a time saver. 
Just install the software, insert the USB stick, and the software opens without a blink. I like it, should have done it years ago. 
I still would prefer a serial number activation like Sonar uses. We are lucky they have not changed their system. I especially like that I can upgrade my computer and not have to even go on line to install Sonar. MY DAW is off the internet as I don't have W LAN where the studio room is.