Nick,
The explanation for the #2 idea is that sometimes, connections come loose and sometimes the cable falls down the wall a bit.
The Dongle is a short HDMI cable at the back of the wall-plate, usually with a female HDMI connector on it.
View attachment 42378
The wall-plate generally has an HDMI cable connected to the dongle on the back side of the plate. The other end of the HDMi cable generally routes inside the side wall and to the back of yet another HDMI wall-plate closer to the TV. Then a standard HDMI jumper us used from the front of each of those 2 wall-plates to connect the TV to the source (DVD, Satellite etc.).