What does the output of apt-get install --dry-run mean?

The output of apt-get --dry-run means, as you already figured out, that openssl 1.0.1-4ubuntu5.11 is currently installed on your system and that it will be replaced with openssl 1.0.1-4ubuntu5.12 once you run the install command.

The numbers (500 and 100) in the output of apt-cache policy openssl indicate the priority of the given repository. As you can see, there are packages of openssl 1.0.1-4ubuntu5.12 available from two repositories (precise-updates and precise-security), both with a priority of 500. If the precise-security priority were to be 700, apt-get would first try to download the package from that repository.