Document basic parts of the hydration/rendering design

[bgrant0607]

There's no design doc for the "v1" hydration design in the repo, I didn't find any issue or PR that discussed it, and I didn't see a detailed explanation on the doc site, so I'm filing this with a link to a copy of the original design. If useful, it could be converted to markdown, but this is quicker for now.

This doc should be world readable with the link. https://docs.google.com/document/d/1-68So9E3_8Vj5IQh6ysQv0icGEWnppTAyNmPjXSOtN4/edit

cc @justinsb @mortent