I was under the impression it would only run code in loop() over and over again.
The loop function is called over and over. Don't you see examples, though, where calls to digitalRead(), analogRead(), digitalWrite(), analogWrite(), etc. are called?
You can define functions that you call from loop(). Those functions can call other functions, like digitalRead(), analogRead(), digitalWrite(), analogWrite(), etc., or other functions that you define, that call digitalRead(), analogRead(), digitalWrite(), analogWrite(), etc.
is there anything i should be reading that shows me otherwise?
Anything that progresses beyond the "See Spot Run" level of project.