[brandygang]

I believe it'd more likely be the former, establishing a short story, theme or context to the threads roleplay. Location included.But only up the first post, loose guidelines to leave the thread open ended enough to join in without monopolizing on it's content.
Not unlike Interactive/branching stories throughout the internet, where the OP sets the tone but others are free to interpret and input it as they wish.

In a similar (nonfetish) use of this I'm aware of, people only use location but nothing is established, and OP has little say or role outside that, beyond what they wish to contribute. That's because there's a loose continuity throughout the board, with people caring about what happens to their characters and stories. Since here it's just fetish rp, I doubt most people will care about that sort of thing.
"Pic related" is right, you've pretty much nailed it. They'd post Rei everytime they play as her, their post mostly her dialog as if chatting.
If they needed to perform an action or describe a scene, green text could be used.

Ex,
"Why yes Misato Shinji is ready to try the new NERV hypercompression equipments"
>Rei begins to strip
>She pushes a button and the bondage machine starts up
>It looks like [Insert description here]

And the pictures, as you said would be mostly visual aid. If someone didn't have a picture of Rei in Bondage or were lazy they could describe it in text however.