I agree with your first sentence, but disagree with your second one. AUTO is great any time the roads are slick - light rain, heavy rain, snow, ice, gravel, etc. Usually the roads are slicker with light rain as all of the slime and oils have not yet washed away. And people usually try to drive "normal" when it's only a light rain, and more traction is needed when driving quicker on wet roads. In heavy rains people usually slow down due to poor visibility and ponding issues, so I find AUTO less needed (but I still use it).
I usually use the pulling into traffic example when trying to determine if you need AUTO. If you need to turn right onto a busy street and then quickly accelerate, do you think you'll lose traction when driving normally? If so, then use AUTO.