Doesn't Sinking Current mean the current is going into the Pin?
Yes. If you have it output/low it will attempt to make that pin 0V, thus sinking any current going into it. It will succeed in comfortably sinking around 20 mA.
If it is output/high it will attempt to make that pin 5V, thus sourcing that current. It will succeed in comfortably sourcing around 20 mA.