Confused about Ryanair cabin bag policy

Here's a quote from the Ryanair website:

What you CAN bring on board

• All passengers are entitled to bring 1 small personal bag on board which must fit under the seat in front of you (35cm x 20cm x 20cm). Examples include, handbag, laptop bag and small back pack.

• Passengers who have purchased "Priority & 2 Cabin Bags" or Plus/Flexi/Family ticket or connecting flight ticket can bring 1 additional 10kg bag on board which must fit into the baggage sizer (not exceeding 10kg and dimensions 55cm x 40cm x 20cm).

• Passengers who choose not to purchase ”Priority & 2 Cabin Bags” and arrive at the gate with 2 bags, your second larger bag (10kg weight Dimensions: 55cm x 40cm x 20cm) will be taken off you, tagged and placed in the aircraft hold free of charge. Please ensure all valuables are removed. You will collect this bag at the baggage belt at your destination airport. (N.B. Remember to bring your passport with you if you need to go through passport control at your destination airport.)

We are 2 adults and 2 children. In addition to the 4 tickets, we purchased two "priority & 2 Cabin Bags". I thought it meant we could bring 4 small bags (35cm x 20cm x 20xm) + 2 medium bags (10kg, 55cm X 40cm x 20cm).

But then I saw the highlighted section above, which seems to indicate we didn't have to pay for "Priority & 2 Cabin Bags", and we can bring 4 medium bags free of charge.

So does the extra fee for "Priority & 2 Cabin Bags" only give us the right to have the medium bags with us in the cabin (as opposed to checking them at the gate)?

Another small concern is about packing sharp objects (such as shaving razor) and liquids in larger containers. I usually pack them in my checked baggage, but this time I didn't purchase checked baggage. These items are usually not allowed to pass through security. So if I don't check in any bags (prior to security), does it mean I can't pack a razor and liquid containers larger than 100ml? Or can I still pack them in a bag that I'll check at the gate?