You are nearly completely right, except that the interpretation of 0xC5 is more delicate. From Wikipedia:
Count of "unstable" sectors (waiting to be remapped, because of unrecoverable read errors). If an unstable sector is subsequently read successfully, the sector is remapped and this value is decreased. Read errors on a sector will not remap the sector immediately (since the correct value cannot be read and so the value to remap is not known, and also it might become readable later); instead, the drive firmware remembers that the sector needs to be remapped, and will remap it the next time it's written. However some drives will not immediately remap such sectors when written; instead the drive will first attempt to write to the problem sector and if the write operation is successful then the sector will be marked good (in this case, the "Reallocation Event Count" (0xC4) will not be increased). This is a serious shortcoming, for if such a drive contains marginal sectors that consistently fail only after some time has passed following a successful write operation, then the drive will never remap these problem sectors.
As you can see, 0xC5 sectors are those for which there is still a chance to recover the data they contain. In this sense, data on 0xC5 are frozen, and the remapping will take place iff the data can be read, and the integrity of your files restored completely by means of remapping
0xC6 is instead,
The total count of uncorrectable errors when reading/writing a sector. A rise in the value of this attribute indicates defects of the disk surface and/or problems in the mechanical subsystem.
Earlier in the article, it is said that:
Work at Google on over 100,000 drives over a 9-month period found correlations between certain SMART information and actual failure rates. In the 60 days following the first uncorrectable error on a drive (SMART attribute 0xC6 or 198), the drive was, on average, 39 times more likely to fail than it would have been if no such error occurred.
You should notice that the presence or absence of such errors is not a powerful indicator of approaching disk failure, because a large fractions (about a third) of all HDDs fail without a single SMART warning. However, once one such failure has occurred, the chances of approaching failure are much higher.
One simple comment about the RAW_value: you are lucky that your manufacturer uses it in the intuitive way, i.e. as a simple count of this kind of errors. You are lucky because SMART is not part of the T13/ATA standard; RAW_VALUE attributes are 64-bites of data which can be encoded in any format the drive vendor wishes. Seagate (for instance, I have some experience with this) encodes some of their attributes; the formula for decoding them is unknown and undocumented. And, what is worse, they are not alone in doing this.