If I create a rectangle with a solid colored fill, for example, how do I then take some typed letters and cut them out of the rectangle in order to end up with a rectangle with see-through shapes representing the typed letters?
You create outlines of the text by going to
1 Type>Create Outlines
2 Place outline text over the rectangle
3 select both and go to Object>Compound Path>Make
Or another way that I like is for step 3
3a select both and click on the live paint bucket to convert the art to a live paint group
4 Use the live paint bucket to fill the outlined text with a fill of none.