From the research I have done, and by all means I am NOT an expert, your are correct in the assumption of the markings.
If an observation vehicle was assigned to the 2nd SS Panzer Div. the symbol would be from top down, 2nd SS mark, the line symbol under would designate type/purpose,( wheeled, half tracked, full tracked, observation,communications, liasion, ect), the registration number on the bumper will tell where the vehicle was originally assigned to. Example, WH= Wermacht, H= Heer, ( german regular army) or SS.
The flag holder on the fender may have been for recognition of high ranking officers riding with the unit.
I hope someone else can clarify and/or correct me. I might add that alot of those divisional and organizational markings were left off from about mid war until the end as many units were regrouped and renamed, by that time the function of the vehicle was obvious or wanted to be kept "unpublished". Hope this helps.