The screen knows what color it displays at all times. It knows this because it knows what it doesn't. By subtracting what it does from what it doesn’t, or what it doesn’t from what it does (whichever is greater), it obtains a difference, or deviation. The controller board uses deviations to generate corrective commands to drive the display from a state where it does not display black to a state where it does, and arriving at a state where it displays black, it now doesn't display anything.
Each of the pixels is actually a little shining eye which watches your every move. When the pixel’s eyelid closes, that pixel turns black. That’s why they call it putting a display “to sleep.”
I like your explanation, but to be fair, it depends.
Some displays are implemented with dual-eyelid technology for the blackest of blacks. Naturally, like all genius engineering, we see this in nature: cats.
It depends afaict. OLED screens have a per-pixel light, and they turn off pixels to make black. LCDs have a single large backlight and pixels that the light shines through and they can change color (but not turn off) so in that case they turn as opaque as possible, but don't completely block the light.