You are partially correct! The data does traverse down the OSI model on the source node.......across the network medium.......to the destination node....and back up the OSI model.

BUT, transmissions do not have to actually start at the application level. Have you ever heard of two or three tier routers? They only use part of the OSI model.....hence two or three layers are transmitted....not all 7.

It goes like this:

Data to be sent in this datagram = XXXXXXXXXX

Layer 7 puts on application specific headers:

AAXXXXXXXXXXA

Then Layer 6 for presentation:

PPAAXXXXXXXXXXAP

Then Layer 5 does the same on a session basis:

SSPPAAXXXXXXXXXXAPS

Layer 4 for transport portion:

TTSSPPAAXXXXXXXXXXAPST

Layer 3 goes next:

NNTTSSPPAAXXXXXXXXXXAPSTN

Layer 2 puts on the Data Link layer stuff:

DDNNTTSSPPAAXXXXXXXXXXAPSTND

The finally the Physical layer:

PPDDNNTTSSPPAAXXXXXXXXXXAPSTNDP

This is then transmitted. At the destination...each layer strips the corresponding layer and sends it up to the next layer....etc.

This is very basic...it's more complex than this tutorial...each layer does not have the same size of headers...and such...but this gets the idea across.