Yes, to be sincere I oversimplified the concept in order to make it into a more playable format, but basically the idea stands there: the diference between the knowledge of a concept and the underestanding/mastery of it.
Applications are a concept which is a bit more tricky, because you need to make them clear to differentiate from just new steps in the tech tree, so I did not consider them much. Other than you may have "received" the tech, but you cannot develop over it (neither learn following tech) until you have underestood the basics: so, if steel requires iron works, you can't trade for steel if you do not have a "learned" iron works (that is, even if you are using iron works already as you traded for it, you still need to learn it, to start investigating or trade for steel).
The idea about the steel you propose in the second paragraph is what I simplify in the "extra cost (being gold/production)". If you have traded the tech, you have not been able to build the proper logistics/infrastructure to use it beforehand, so either you are relying in imported materials / machinery (scarce and expensive), or you are building your initial, unreliable prototypes based on imported blueprints (or the direct imported items). In any case, you'll hit bottlenecks, production faults, need for external support... that would make your production less efficient, and this is the summary of it all: this is I don't need to know if it is because I have only one loaned stell mill operative, or because I have to import raw materials from my steel-wise neighbourg: in the end the result is my production is more expensive, and that is what I would reflect in-game.
As a positive effect, all that trial-and-error, external support learning,... is indeed some form of research, and there is where I propose that you can gain beakers towars the tech by building these more expensive units-buildings.