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If you want to see a really baby version of this I think Ex. IV.1.9 in Hartshorne is good. Of course, you said you already knew how to do curves and there are many more assumptions there, but still.
I take your point about $i^!$. I'm not sure that Hartshorne ever does this. Does this tag from the Stacks project help? I haven't actually looked at your lemma.
Often a synonym for "locally closed immersion", so a closed embedding into an open subscheme. (I feel like I've seen the opposite order but in Milne's setting it shouldn't matter.)