Yes, 10±0.5 is because of parallelism.
If you want to meet the parallelism tolerance specified in Table 3, the absolute difference between measured distances shouldn't be greater than 1 (although one can rightly say this isn't 100% true).
As for "overall" dimension, yes, this is how I would interpret it. Something like total length, total height, etc. Is this what the authors of the standard had in mind? I have absolutely no idea.
Regardless of that, I think you already noticed how many problems hide behind use of standards that deal with the animal called "general tolerances". It actually does not matter whether we talk about welded (ISO 13920) or machined (ISO 2768) parts - these standards simply leave so much space for different interpretations that it is practically impossible to avoid ambiguity, even for such a simple part like yours.
One of the fundamental rules in dimensioning and tolerancing states that dimensions and tolerances shall not be subject to more than one interpretation. Thus, if one really cares about following this rule, she/he should stay away from general-tolerances standards as far as possible.