It sounds like you are not really using the Overtime Work field -- just increasing a resource's hours per day?

If you are using Overtime, you have to assignment it to the task specifically. Increasing the number of hours the resource is scheduled (in the Task Usage or Resource Usage view) just increases assignment units.

You are correct, assignment units over 100% means that the resource can create more than 8 hours of work (effort) in an 8 hour duration.

Decreasing task duration means the finish date moves in (earlier). If you start moving the finish date of tasks in then you might be able to finish the project earlier.