Hi @cottonbj, glad to hear that things are working!
In a nutshell, device handler code is used to control and manage a device from within SmartThings, and to receive physical actions performed on a device to update SmartThings on it’s current state. So when you control your valve from the phone app, or physically, the device handler manages all the communications/data/changes between ST and device.
SmartApp code enable you to perform actions on a device, or a group of devices, based on rules and conditions you define. In the case of the water valve, SHM turns off the valve and turns on lights. Rule Machine is also a very popular rules engine used within the community when more complex if/then/else conditions need to be met.
Another great SmartApp example, Keenect, is one for managing and controlling temperature in your home with smartvents and thermostats.
Other SmartApps, like SmartTiles, provides a method for using spare phones and tablets as wall control panels with your ST devices. It’s a lightweight client with a lot of flexibility.