yes, your interpretation is correct - each snapshot (combination of type, id and time) counts, the contents are irrelevant for that purpose. note that you can store multiple pxar archives and blobs in a single snapshot, so it's possible to backup '/' as root.pxar, '/etc' as etc.pxar and '/home' as home.pxar all in one snapshot for example.
in general /etc including /etc/pve is probably the most relevant part of a PVE host to save (beside guests, obviously
). you might also want to take care of templates, snippets, etc. from your directory storages depending on your usage. /var might also contain interesting things (like logs, but also the actual sqlite DB backing /etc/pve), as well as the home dirs (/root and /home/...).
since PVE uses Debian under the hood and allows a lot of flexibility/customization, it's a bit hard to give advice fitting all systems out there
when in doubt I'd rather backup more (and exclude specific cache/tmp dirs that are completely uninteresting) than less.