わかりました, what does it really mean?

[Elizabeth]

J44, that's a very astute question.
During the explanation, the subordinate would likely interject repeatedly a short and sharp "hai" which is equivalent to "Yes, sir" in English. If the subordinate is a very young and new employee and the boss is considerably older, the subordinate would likely say "ee" "ee" numerous times during the explanation to show a higher degree of respect. (Note: Of course, "ee" cannot be short and sharp.)
When the explanation is finished, the subordinate will likely respond with "Hai, wakarimashita" or "Ee, wakarimashita."

目上の人の説明に対するあいづちのように、『はい』を 使うのです。
基本的に返事は「はい。」です。(The standard response to a superior is "hai"). In studying the rules for formal speech, I've never encountered the etiquette of younger workers using less polite forms with a much older boss.