I must be missing something big. Page 12-5 of the PHAK tells me that a station at 5,000 feet above sea level would convert its 24.92 pressure reading to 29.92. I understand that this helps to track barometric pressure changes as it removes altitude from the equation. But if that is the reported altimeter setting doesn’t it,well, defeat the whole purpose of taking feet above sea level into account for aviation purposes? Obviously I’m missing something, but this is the way the PHAK words it. Do they use another altimeter reading for aviation purposes, perhaps? In other words they report a different setting than the one they converted to in the example above?
If you have 29.92 set in your altimeter's kollsman window and your airplane (altimeter) is flying or sitting where the ambient pressure is 24.92 your altimeter will read (roughly) 5000 ft. indicated altitude.
Your altimeter simply indicates the "difference" between what is set in the kollsman window and the ambient pressure wherever your altimeter is located. The scale at lower altitudes is roughly 1 inch Hg equals 1000 ft.