We may have to get george/Hef to comment, or someone who's more into it than I am.
You've got what's called the 'backing.' That's the first line that goes onto the real. It's kind of like a braided line, IIRC; I haven't seen mine in about 20 years 'cause it's original!
Attached to that is where you have your actual fly line. That can be many different types such as floating, sinking, tapered, weight forward, etc.
Onto the end of the fly line, you'll attached this 'loop' with some kind of braided mesh that slides over the tip of the fly line. It gets held in place by a 'collar' that is slid over the top of the braided mesh.
To that loop, you attach the leader. To the end of the leader, you tie the fly. As the leader gets shorter from losing flies, etc, you can extend it by adding 'tippet.'
To my memory, the only place the nail knot may still be necessary would be the backing to the fly line.
pretty much right would add the following.
on the end of the fly line. Get a fly line with a loop. Get a leader with a loop. then you can attach the 2 without a knot, easier to change in the future. Do away with the braided mesh and the collars, just more complications. keep it simple, loop to loop.
Leader is for the most part a tapered line (usually mono) that is thick next to the fly line and is tapered down to whatever pound test you want the tip. usually they are called 1x, 2x, 5x or so on. don't worry about the x's. Just look/ask for about what pound test you want. Also available in different lengths. Commonly 7 1/2 or 9ft. So you'd ask for a 7 1/2 ft 8 pound leader.
the taper on the leader helps you to cast the fly so it lays out in a nice straight line when you cast. A transition more or less from the heavy fly line to the fine line (usually mono)that you tie your fly onto.
Now if you want you can tie your fly right to the leader. But when you tie on a different fly (trees love to eat flies) because of loosing one or deciding to try a different one you loosse a little bit of the tapered leader. After a dozen reties you'll start getting into heavier and heavier leader. So at certain point that heavier leader may cause spookier fish to shy away from your fly. So to avoid this issue one ties on a tippet. a tippet is about 2-3 ft of commonly just plain old mono of what ever pound test you want to use. You then tie you fly right to this. then after changing your fly a bunch of times you'll use up the tippet, you cut it offf and tie on a new tippet. starting the process all over again. A clever guy may ask "why not just use the tapered leader up and put on a new one?". Cost, the usually cost a couple of dollars. Straight mono for the tippet is dirt cheap. So in the long run its more economical to use tippet.
Now if you tie a loop on the end of you leader and you tie a loop on the start of your tippets you'll just about never need a new leader. So you need to tie a loop knot.
once you have your leader on
