I did a few searches, because I'm sure this topic has come up before, but my search-fu must be weak today.
My impression from the RAW is that the effect of auras is based on the location of the caster, not of the target. This is of particular import with R: Arcane Connection (and several of the odder Mystery ranges); if I'm standing in my covenant's aura and casting a spell on someone seeking sanctuary in a church, The big aura on said church doesn't matter.
Am I misremembering? Obviously, there's always the ability to SG-fiat: "God blocks you". But what's the RAW say?
I believe you are mostly correct. I say "mostly" because the church's aura would affect the target's magic resistance, but not your casting roll, and so could become involved. I don't have my books on me to help you out, though.
When you cast a spell, you're affected by the Aura where you are. If your target has magic resistance, that is afected by the Aura the target is in.
As an example, Marius of Guernicus is scrying on Father Albanus, a most Faithful priest suspected of knowing too much about the Order.
Marius sits in his lab, Magic Aura 4, that's +4 to his casting roll.
Albanus is currently in a most holy church, Divine Aura 5. If Albanus was just an ordinary priest, that wouldn't matter much, but Albanus has True Faith 3, giving him magic resistance 30 on his own. Because this is a Divine power, he adds the strength of the Aura for a total of MR 35.
Had Albanus instead been a bad boy, with an Infernal Magic Resistance, he would have subtracted 5 times the Divine Aura (=25!) from his his MR, making him an easy target.
Please not that the Aura does not provide magic resistance to anyone who does not already have it.
So mundanes are still easy prey.
That however is something that can be quite nice to play with that it does anyway.
Even that such an aura may give a higher bonus. (ie divine vs magic for a very holy person might give 5*Aura, while giving *1 or *2 for a more regular person)
As others have said, the effect of the aura on you is based on the local aura at your location.
So, if the caster and target of a spell happen to be standing in different auras, then the Casting Total of the caster is affected by his local aura and the Magic Resistance of the target (if he has any) is affected by his local aura.
Or even more precisely: The effect of the aura is based on the local aura at the respective physical location of the bodies of the caster and target(s).
Actaully to be super-pedantic, that doesn't seem right. It is possible for a character to "be" in a different physical location to his body. For example, a character who is a ghost is affected by the aura of where the ghost is haunting, rather than the aura of where his corpse happens to be rotting.