Yes you are right about the removal of models. It represents the combat effectiveness of a unit as well as it's ability to cause damage. The unit is removed as soon as it has taken enough damage (or in the case of my first game my opponent rolled snake eyes two turns in a row to enable my cavalry to run amok longer than they should have). The nerve test (morale) is actually very simple and works well. I would definitely recommend you giving it a try as it is a game where you can play a 2000 point game in about 2 hours easily. 2000 points being the equivalent of 2500 or more in WFB money. One thing that does really appeal to me is the modelling aspect. I can make a diorama of models that fit the unit footprint and have a nice little scene wandering around the battlefield until it's destroyed.
All in all I can play a more strealined WFB using all my old models without the rebasing nightmare that AoS brings.