my question is...when I put cash in my real life wallet, its cash or paper if you will. When I put a credit card in my wallet its not cash but its linked to a company that has my cash (and is keeping it secure)....so what ON EARTH an i putting in a Bit-Coin-USB-Thumb-Drive-Wallet?
You're actually not putting anything
into your Bit-Coin-USB-Thumb-Drive-Wallet.
That wallet is unchanged by your "putting something into it".
What you do is: you tell everybody on the network that you intend to put a bitcoin into your wallet.
Everybody on the network nods and it is commonly agreed upon that that specific bitcoin is in your wallet now.