You are partially right..These are problems related to algorithms.
Algorithms are used to solve a problem.
Algorithms have three things:
1. Input
2. Computing Function
3. Output
Big O notation is used to show the complexity of a function.
(It upper bound of complexity in technical terms. Upper bound and lower bounds relate to Mathematics more. You will come to know about these in future, as you keep on reading algo. )
First of all,complexity of a function here means computations required to solve a problem. (OR say number of comparisons done by computer.)
It can be for Insertion, Deletion or Search or Sorting. (You are considering only Insertion. )
Complexity means "Effort required to compute the result of function with respect to Your input N"
Sooo...
Big O notation shows the complexity in terms of powers of N. (You know it)
complexity of N means that,
It is linear. As N grows, Computation grows w.r.t N.
(Note that if a computer has clock speed of 3 Ghz. Then it can perform this calculation in 1/3*10^9 seconds. (Which is very small.)
So dont see time, But How it is growing with increase of input size.
Similarly, for N.log(N) It increases a bit less than N^2.
It is very logical and interesting to see how it happens..Read some articles. It is necessary.
Master method and few other methods are used to calculate it.
Algorithms by Cormen gives you very deep understanding about these.