That's pretty much the same understanding I had. Espada were always the most elite/powerful hollows I thought. Aizen uses the Hougyoku to increase the hollow's powers and turns them into arrancar (which I think was explained as tapping into Shinigami powers - as opposed to Shinigami tapping into hollow powers ala Vaizard). I think after Aizen created his Arrancar he probably remade the Espada to reflect their new powers. I could be off too of course...
Edit - stolen from Bleachexile.com encyclopedia (
http://www.bleachexile.com/information/ ... yclopedia/)
Hougyoku - A device Urahara Kisuke created in his days of being the 12th Squad Captain of the Gotei 13 and also the First Bureau Chief of the Technological Development Bureau. This device allows a Shinigami’s transformation into a Hollow and vice versa. It will then allow the Shinigami-Hollow hybrid climb a greater level, surpassing the limits of their abilities. Hougyoku was dangerous and Urahara Kisuke was exiled to the real world for his creation.