DecaDent explained the time on=time off idea perfectly. We want to restore our HPTA (aka HPGA) to precycle levels. The only way to do this is to allow the complex negative feedback mechanisms time to restore endocrinous homeostasis.
About the receptor issue, I personally believe people mistakenly equate AR counts to receptor up- & down-regulation. It is true that the number of androgen receptors increases under the influence of exogenous androgens. Yet, over time, there will be a general receptor down-regulation because the body is trying to maintain some degree of homeostasis during a period of supraphysiological levels of circulating androgens.
The principle of receptor up- & down-regulation is a medical fact that can be found in any decent anatomy & physiology textbook. Clearly, there is some mechanism at work that either prevents the binding of androgens to the AR or prevents the delivery of an androgen to the target cell after it has bound to the correct receptor. I'm not fully convinced that receptor "saturation" is the only explanation. If this were not true, there would be a perfectly correlating relationship between androgen dosage and LBM gains (i.e., increasing your dosage would yield increased results). Further, users would not experience diminshing returns over time regardless of the cycle length.
Any experienced user can attest that neither condition applies to androgen usage. Consequently, no one can build a "Mr. O" body in just a few years, regardless of the type or amount of androgens used. It takes years and years (more like a decade or so) of consistent training and androgen usage (and awesome genetics) to reach that level.
