Your understanding is correct. Those subwoofer outputs can only be hooked up to an external amp that drives subwoofers – most subwoofers contain their own built-in amp. The sound is filtered so only low frequencies pass through. See page 86 of the Denon S510 downloadable manual where it says:
Set LFE (low frequency effects) signal playback range when you want to change the playback frequency (low pass filter point) of the subwoofer. You can select among these frequencies:
80 Hz / 90 Hz / 100 Hz / 110 Hz / 120 Hz/ 150 Hz /
200 Hz / 250 Hz (Default is 100 Hz)
To get full-range audio pre out jacks, you will have to spend more, such as
$999 for the AVR-X3300W.
Look at
Accessories 4 Less to find better prices on older models.