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I am not getting clarity on how pull up, pull down, and GPIO values work.
If a pin is input and pull up, does it make the value 1?
If a pin is input and pull down, does it make the value 0?
If the above assumptions are wrong then what is missing in my understanding?
This applies as long as nothing else is connected to the pin. When you connect something to the pin, then that something else can force the pin to a different value - that's kind of the point of it.
The pull-up or pull-down provides a default for the input when nothing is connected.
If you connect an input pin with a pull-up to ground, then current will flow out of the input to ground. It will be a very low current, likely less than one milliampere because the pull-up resistors are typically more than 10 kiloohms.
This really can be used to light LEDs when you don't have resistors handy to limit the current. More a sort of "party trick," though. It is exceedingly dim.
