You are correct in that I have NOT enabled hybrid environment or password synchronization... not during this setup nor was it ever enabled previously.
We simply want good old-fashioned directory sync for now to pull objects from our AD to O365; in the future we'll look to enable password synchronization and in the more distant future we'll be looking to deploy ADFS. But again, for now, we just want Directory Syncronization with no additional enabled features.
Hope this helps answer your questions!