Please HELP my Brain w/ Plain English and "...files will be replaced..."

[dnanian]

No, you can't do that. You'll have to follow the steps in the User's Guide under "Recovering from a disaster".

Note: it's significantly more challenging to restore from an image than it is to restore from a bootable backup. Since you seem a bit unsure, I'd really suggest spending the additional $100 to get a drive you can back up directly to. It'll save you time, will let you test your backup before you send away the Mac, etc...