Jim,
what most people do not understand is that the all of the information on a 4473 does not get sent in during a background check. I enter your details and the type of gun into the system but none of the details related to the gun such as manufacturer or serial #. Those details are retained on site through the 4473. You are pretty much correct in that a manual search is conducted on the part of an FFL holder during a trace. I believe that the BATF does put them into a searchable database once and FFL goes out of business and send the records in, but I am not certain of this aspect. Hope that helps a bit.
Steve