Yep, that is correct. The point/facts you were missing was how relevant and audible that dither noise is. When we record something, the recording venue always has noise, the mics used always add noise, the mixing and mastering processes add noise and then when you reproduce the recording, your amp adds noise, your HPs or speakers add noise and your listening environment has noise. All these sources of noise add different amounts of noise, for example a good amp will generally add very little noise, usually less than 16bit dither noise but in most other cases dither noise is lower or much lower than any one of the other noise sources, let alone all those other noise sources combined. As mentioned, it is sometimes possible to hear dither noise but the conditions required to do so are not realistic. First you have to pick a recording that has particularly low levels of recording, mixing and mastering noise, your system and playback environment have to have very low levels of noise and then you have to play that recording at very loud levels. Even if you have such a recording/s and reproduction system/environment, then the human ear adjusts itself for low noise and for comfort sake one would listen at a lower level than normal rather than much higher than normal. In other words, unless you manufacture the unreasonable conditions specifically to hear dither noise of 16bit, it is always going to be inaudible and irrelevant.
Hope this makes sense?
G