Makeup gain follows the compression stage, and it's just a simple volume boost (multiplier in digital terms).
Unless the Attack is very fast, a compressor doesn't remove transients - they slip through. And if it's fast enough to remove transients, it probably damages the sound. I think Saturation effects are better at knocking the transients off (tube/transformers/transistors/tape or models thereof).
This is why compressors are often used to make a sound more punchy: the attack appears greater, because the sound following it is lowered. When you add the makeup gain, the overall effect is to boost the attack portion.
If you are familiar with ADSR on a synth, the effect of A and R with a compressor is similar but inverted.
The Threshold can be considered the trigger for the Attack and Release. Both of these have adjustable time delays - imagine your fader moving at different speeds down and then back up again.
So although a sound may have dropped below the threshold - during the time the Release is acting, the sound will be lowered until the release period has finished. So the Ratio setting is really only the maximum achievable, but it's constantly floating between that and 1:1.