Dreadnought battleships were as important to the way WW1 was fought as nuclear missiles were to the way the Cold War was 'fought'. While they were very rarely used in combat, they had a vast effect on strategic thinking, and ultimately a great effect on its outcome.

The battlefleets of Britain and Germany were essential in the balance of control of the seas. Britain, with its advantageous position in the North Sea, had set up a distant blockade of Germany. Lightly armed ships, typically old cruisers or armed merchantmen, patrolled the English Channel and the northern reaches of the North Sea. German ships were quickly captured, while any neutral ship carrying contraband to Germany would be directed into a British port, and the cargo confiscated (if not the ship itself). Britain was able to do this because it, in the Grand Fleet, maintained the ability to destroy any German attempt to interfere with the blockade. Meanwhile, Germany sought to prevent Britain and France from shipping supplies to Russia. Russia's main ports in 1914-18 were St Petersburg in the Baltic and Sevastopol in the Crimea, with St Petersburg being much closer to British and French ports. However, Germany could control the entrance to the Baltic, as long as it had a fleet to do that with. Having a strong fleet also gave the possibility of interfering with the enemy's goals - as long as Germany had a fleet, it was a threat to the British blockade. Losing the fleet meant that the nation lost their ability to prevent their opponents achieving their strategic objectives, and their ability to achieve their own. This was particularly the case for Germany, with its smaller fleet. The British could absorb one-to-one losses and still come out ahead. This meant that the High Seas Fleet had to attempt to create circumstances where it could engage and destroy only a small portion of the Grand Fleet - giving the Germans the chance to damage the Grand Fleet with little chance of sustaining losses in the process. The British were well aware of this, however, and so rarely gave the Germans such a chance. As a result, while the British were frequently happy to give battle, the Germans were often more reluctant. Neither side could risk losing battleships to mines or submarines, because to do so risked tipping the scales towards the opponent in battle. As a result there are frequent cases where battlefleets sailed, encountered (or even misidentified the presence of) a submarine, and withdrew. All this comes together to mean that dreadnoughts were just as effective in wartime by not fighting. Merely by being a potent threat from in port, they could prevent the enemy from acting.

As to your second question, there are several reasons why this wasn't done. Firstly, dreadnought battleships were rarely used for shore bombardment. Shore bombardment meant putting a large, expensive strategic asset into a greatly constrained position. Ships in littoral waters were under great threat from mines, torpedo boats and submarines - a fact demonstrated well at Gallipoli, where three older battleships were sunk by mines, two by submarine and one by a torpedo boat. These risks were unacceptably high for ships that had an important role in fighting at sea, as covered earlier. Secondly, to use high-elevation guns would increase the flight time of the shells. This would decrease accuracy against a moving target - in other words, against ships. As such, a ship with such guns would be disadvantaged in naval combat. Given that naval combat was the primary role of the battleship, this was an insurmountable disadvantage. Coastal bombardment was instead the primary focus of older ships, and purpose-built monitors. I'd also point out that the Allied failure at the Dardanelles had nothing to do with the failings of battleship guns for shore bombardment. The Allied naval bombardments of the 19th-4th March 1915 successfully suppressed the outer defences of the straits. However, the inner defences were much trickier to destroy. The outer defences were mostly in forts, fixed positions that were easy to see, spot, and fire upon. Much of the inner defences were mobile artillery batteries. These could be positioned in dead ground, able to fire indirectly on ships in the straits. The problem here was not the ability to fire back at them, but the ability to spot the fall of shot effectively. The batteries could not be seen from the ships, so nobody knew if they were firing at the right targets. The artillery batteries covered several minefields. While a battleship could survive a pounding from the coastal batteries, it would struggle to survive a mine hit. Minesweepers could clear mines, but were too small and fragile to survive the artillery fire. The battleships could only suppress the batteries from inside the strait, but couldn't operate there because of the mines. The minesweepers could only clear those mines when the batteries were suppressed. This dilemma was why troops were landed, as they could suppress the batteries without having to worry about mines in the straits. The failure of the landings to do so relies more on failures of communication, planning and exploitation of gains than it does on any lack of artillery support. The initial landings were generally successful, but these gains were not exploited while the Ottomans were off balance. Once the Ottoman defenders were able to dig in, their superior lines of communication essentially ensured that it would be difficult to remove them, as reinforcements could be easily rushed to any sector pressed by an attack, something much harder to do with an Allied advance.

It is important to remember the belligerent nations before drawing conclusions about the whole war. The Austrians had a decent sized navy, but it was limited to operations in the Adriatic by the much stronger French and Italian fleets. For the same reasons, the much smaller Ottoman navy was limited to the Black Sea and the Sea of Marmara, and the Russian fleet (which did have a substantial naval expansion programme in place before the war, even outspending Britain in 1913!) could not compete with the Germans in the Baltic. Therefore, the only two fleets that had any real prospect of clashing during the war were the British and German Grand and Imperial Fleets.

Knowing they could not break the British blockade by brute strength, German strategy during the war was to preserve their fleet so that they had a powerful negotiating card when it came to peace talks at wars end. The British in turn knew they had naval superiority over the Germans, and therefore did not want to risk tipping the balance of power in an unpredictable battle (as Churchill put it, Admiral Jellicoe (British naval Commander in Chief) was the ‘only man who could lose the War in an afternoon’). While Dreadnaughts were incredibly powerful, they were also very vulnerable to enemy fire and torpedoes, and were increasingly perceived as ‘glass cannons’. Compared to the Ships of the Line of the previous century, where it would take hundreds of cannon balls to sink a ship, a modern battleship could risk total destruction from just one lucky enemy hit (e.g. HMS Queen Mary at Jutland).

Therefore, I do not think that people were ‘wrong’ about naval combat pre-WW1, rather that naval combat rarely happened on the scale predicted. On the one occasion where fleets of Dreadnaughts did clash at Jutland, the results were very decisive (8,000 dead and 170,000 tons sunk in a few hours) until Jellicoe disengaged the British Grand Fleet for fear of losing more ships to submarines and mines.

TL;DR. It wasn’t so much that predictions about naval combat were wrong, but rather the strategic goals of the belligerent nations and admiral’s cautious nature about losing their expensive ships that caused the lack of decisive naval battles. On the one occasion Dreadnaughts did clash, gunners hit their targets and thousands of men died in a few hours.

Books: 1914-18: A History of the First World War – David Stevenson (2004), London.