So if I understand correctly, you end up with some sort of binary, that you can run on top of some system that abstracts away the hardware and manages resources, correct?
However it's different from embedding an initrd into a kernel image in several ways: The kernel is minimal, containing only the bits which are needed by your application or drivers required to run on the hardware. The application runs in kernel space and is linked with the kernel which gives you a nice performance boost because you never context switch (which is the driver behind the whole project actually). You can also call kernel functions which aren't syscalls, eg. for specialized memory management.
Kernel to userland, thread to thread, process to process, kernel thread vs user thread, etc. It's conflated because different threading models and different kernel/userland separations exist.
Generally speaking (in linux) threads perform much much faster than switching processes.