I still haven't figured out why my simple test case only goes to half-transparency, but I have made 2 heartening advances.
1. I achieved my original objective (fading the edges of the overlaid image to transparency) by using the foreground-to-background gradient on the masked layer, rather than the foreground-to-transparency gradient. I need to study the whole
PS mask/transparency/layer model to understand this better, but it does just what I want.
2. I finally found the Gradient Editor. I had never clicked on the dropdown box itself. Anyway, it has the features I'd been looking for in terms of controlling the "curve" of the gradient.
(I should read more of the manual.)
Thanks for the help!