The 'address' is the node, slot, card, and port that each particular phone is attached to.
Example...
your 1:05.02.01 would be node 1, card 5, slot 5, port 1 and could in theory be any extension...say 105. For whatever reason you decide to move the person on extension 105 to a different office. The old way would be to actually move jumpers, every time. With the newer systems it can be done through programming, as the others have said.
You have it correct in your last paragraph-
