Yes. Installing a data drive larger than the current parity is more complicated, but the end result is exactly what you describe. In the case of replacing a failed drive with a larger than parity model, the parity swap procedure has you covered. If you are adding a drive slot, then you would first swap the parity drive for the larger one, rebuild parity to it while keeping the old parity aside for the moment, then once that is done you would add the old parity drive to the data slot.
NOTE!!! Any backups of the boot USB Unraid stick that were taken before this kind of procedure become dangerous to your data, as drive slot assignments are recorded by drive serial number. The last thing you want to do is forget and restore a backup taken when a current data drive was previously assigned to a parity slot. You would likely lose any data on that drive. Any time you change drive slot assignments you need a new USB stick backup.
Each parity drive in combination with the rest of the good drives can emulate and rebuild a single drive. So, yes, if both parity slots are valid and in sync, you can have 2 data drives fail and the contents will be emulated.
Parity emulates the entire drive, filesystem, blank space, erased files, etc. That means if you delete or corrupt a file, or format the drive, those changes are synced in parity and the emulated drive will match.
PARITY is NOT backup.