#3 isn't really correct.

I wouldn't call spicy a taste. Capsaicin is a chemical compound derived from chilli peppers that causes a burning sensation when it comes in contact with mucous membranes.
Because of this characteristic the taste buds are usually numbed by the spice and therefore it is felt more than tasted.After a certain level of spicyness we can't descern any taste.
Milk, as a neutral base dilutes capsaican so that it appears less "hot". Bread is actually better at neutralizing spice because it absorbs the oils that carry the heat.