I've just gotten to the level to unlock the breeding sanctuary and before I spend the gems I'm wondering how it works. Is it more like the breeding event island where you try for extra cool dragons, or more like the breeding mountain where you breed whatever dragons you'd like too? Which is best to get first, save up for my breeding tree or unlock my sanctuary? Everything I can read online seems to assume you already know how it basically functions.....

It is similar to the mountain and tree except there are several dragons which you can breed at specific levels but they are only breedable in the sanctuary. Fyi do not use the sanctuary during breeding events or races because the possibilities for failures are higher since it has more combos. There is a section in the general discussion sub section which explains buildings.