Help with templates?

As a newbie... I'm somewhat confused with templates.

The links on the templates page don't marry up with the links on the dashboard, i.e. in relation to the list of available templates. If I select one of the templates and choose "Install template" nothing seems to happen (other than the page changing to https://blot.im/sites).

Also what's the significance of the Templates folder on my sites? Re. the option to download a template, what's the value of that, do I place the files in the Templates directory.