So do you simply lay the mask and then use an exacto knife to cut out the area you want the paint to pass ?

Yup.  It really is the best way I've found to mask playfields.  The mask is fairly expensive but so is a good playfield.  On long curves or straight areas I rough-cut the mask and use pinstriping tape (very thin width masking tape.)  I've found the two make easy work of large areas.