When I set bleed, is it within the page size, or added to the page size?

Bleed (and slug) is added to the page size. The idea is to give the printer extra print area that will be trimmed off to leave printing right to the edge of the sheet or page.

(Slug is space added to include print instructions, parameters, agency information or the like to one edge of the layout. It's not as commonly used as it once was.)

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Bleed is outside the page area. If you print your 6.8 x 10 page on a larger sheet of paper the bleed will show anything that extends off the page. Your output will be 7.05 x 10.25.