Yes, that’s basically what it does.
Also, to make it clear, as far as I’m aware, I’m not using any undocumented (or unlicensed) features of DNG Converter. The command line API (which I’m using) is documented here (the click through license is here). XMP and DNG are “open” standards, some of the Camera Raw tags are even documented, others are saved in plain text for all to see.
I use ExifTool for all of the metadata stuff, and much of the XMP editing. I use Dcraw to extract thumbnails, and to get RAW pixel data out of DNGs (which I only use for white balance math - this code was ported over from the DNG SDK).
I use a browser for the UI, so all that’s left is glue code for all of this.
PS: My use case for it, is “interoperability” with my wife which uses Photoshop. I don’t like Photoshop, or Lightroom. As I said above, I wish Adobe launched a standalone version of Camera Raw and saved me the trouble.