This is pretty close to correct, I'd say, but it's a *literary* analysis. Erotica, category romance, and romantic fiction are *marketing* categories.
Category romances are formula driven. More than any other kind of genre fiction, category romance about guaranteeing a *repeatable* reading experience. So category romance publishers have very specific parameters for each of their imprints, such as (real examples here) "features a young heroine who is sexually awakened but inexperienced," or "Strong, gorgeous, medical professional heroes at the top of their game with hearts of gold, and heroines to match." If enjoy one Harlequin® Medical Romance (no joke -- they're serious about meaningful branding), the editors go to extraordinary lengths to ensure that you'll like the next one you'll pick up. If you're the sort of reader who might purchase a Harlequin® Love Inspired (Harlequin's Christian Romance line) novel, you can be certain it doesn't contain any unpleasant surprises.
In the romance publishing business what sets apart "erotica" from category romance with an erotic elements is that all important "happily ever after" ending. Having a romantic story that ends happily isn't enough, it's got to be "happily ever after" which is something different. And the story has got to get there following the particular imprint's formula. I actually respect that. They're not my cup of tea, but category romances retell myths that people want to hear over and over again. That's really no different than endlessly rehashing the hero's journey in fantasy literature. The challenge for any writer of genre fiction is to renew the myth; to bring it to life for the people who want to experience it.
As for the erotica market, I have done book critiques for a friend who writes stuff for that market, even though her stuff makes me want to flush my eyes with bleach. I don't think the market for non-romance erotica is as elaborately segmented as for romance, but I think it will get there. My erotica-writing friend has a lot of fans, enough to put her on the NY Times best seller list, albeit briefly, but that's outstanding for a genre novel. And they clearly like reading about sexual acts in graphic detail: kinky stuff with restraints and pain and multiple simultaneous penetrations. Yet they have nothing but contempt for "50 Shades" which they consider tasteless swill. It's pretty easy to see what their beef is in that case; the heroine of 50 shades is a "bottom" in BDSM-speak, and my friend's heroines are "tops". But there are other tribal divisions in the erotica fanbase whose explanation completely eludes me.
People try to divide science fiction from fantasy or romance from erotica from pornography, but ultimately the market isn't out literary ontologies; it's about matching up authors with readers who might enjoy their work. Suppose you're an author who's written an urban fantasy novel with erotic scenes and a happy ending. You could offer that very same story to Harlequin (a romance publisher), Exotica (an erotica publisher), or TOR Books (a traditional sci-fi and fantasy imprint of Macmillan). Any one of those publishers might take the book on, but what their editors ask you to do with it before it is published will be radically different.