Hi SCN,
As you rightly mentioned about MPOS (this is nothing but a info cube), Planning Area is the storage place and have Key figures (storage containers) assigned to it.
Now, when you create planning area you need to assign MPOS to it, that is where realtion between planning area and MPOS is established.
Further refinement is done when you create Planning Book, you need to assign Planning Area to Planning Book, and since Planning area is already linked to MPOS to that way MPOS is also linked to Planning Book. Once this is done you are asked to assign Key Figures and Characteristics to Planning Book, this is to limit what all Key Figures and Characteristics you want to use in a particular Planning Book.
Now out of all the Key Figures and Characteristics you have assigned to Planning Book, you can further refine the selection in Data View i.e. you can further limit the set of Key Figures and Characteristics in Data View.
Once you are in Interactive Planning you need to create selection profiles, this is to limit what characteristics you want to plan in a specific selection.
Hope this clears your doubts.
Rgds
Sourabh