Hello Jonathan, welcome here 
As a guitarist I would say: Imagine a big truck full of racks of amps and effects, pedals, multi-effects, loopers, synths and audio players: it’s GP4 
and it does not weigh at all… A dream come true.
A .gig file is composed of several racks called rackspaces.
A rackspace is an individual rack in which you connect your different amps, effects, synths and so on in the order you want in the Wiring window.
Then in the Panels window you insert the elements you will need to control the connected devices: a volume knob for a particular amp, a dry/wet mix knob for a delay, a knob to record a loop into a looper and another to play the loop, etc.
Variations within a single rackspace allow you to switch/unswitch plugins or change their settings. You can’t change devices in it because it’s like a physical rack with specific devices connected in a specific order.
You can create as many other rackspaces as you need in the same way to use different amps, synths and effects and/or connected in a different order, and so on.
As a guitarist, in order to keep both hands free to play, I use a pedalboard consisting of expression pedals and footswitches that are associated with the elements of the Panels window to control all the rackspace changes, variations and settings available. See this post
I can’t tell you about Songs and Setlists because I don’t use them at all.
The music I play is not composed of verses, choruses etc.
I compose and play music to accompany poetic and literary readings. So I make music that is similar to film music and I use the succession of rackspaces and variations to change the sound and musical climates.
Feel free to ask any questions, but do not forget to use the search field with appropriate keywords so you might quickly find answers.