whs, yes you understand the analogy perfectly. If you convert images to a lossless format, such as uncompressed PNG, there will be no generation loss thereafter no matter how much editing you do. And you can always use the "master" copy to generate a smaller, compressed JPEG for distribution purposes. For audio files, people use FLAC for the same reason.
For video, however, lossless files are BIG! You just wouldn't believe how vastly, hugely, mind-bogglingly big they are. (apologies to Douglas Adams). So, while there are lossless video codecs, they are not used by or affordable to the general public.
The best advice I have is keep your originals, use an editor with smart rendering if you can. Avoid generation loss, by re-compressing as little as possible. Also, save your video projects which a good program will keep as a kind of "list of edits". Then if you want to make changes, you go back to the original video, load the project list of edits, and add any new edits you want. Then you get the best quality with the least generation loss.