I have always understood that the FL policy on standy is that the list sorts by how much you paid for the ticket. Is this still true?

I had a full fare business class FL ticket booked through Airtran A2B, and I'm also Airtran Elite (via a few weekly flights). Today I was able to get to the airport earlier and asked, at the gate, to be put on the standby list for an earlier flight. They told me the flight was full, so there was no point. I asked to be put on the list anyway, so supposedly she did. They clearly had business class seats left as they announced the $40 upgrades several times.

Once the flight was boarded, they started calling standby's. After they boarded two standby's, I politely asked where I was on the list, as I had a full fare business class ticket.

The supervisor replied that standby order has nothing to do with the ticket you hold, but rather with your "priority code." When I asked what that was, she replied it goes by 1A, 1B, 2A, 2B etc and that those are internal FL codes for employees to use, and she was not going tell me what they mean.

They then boarded another standby not an Elite as she mentioned that this was only the second time she had flown, and whose BP for the next flight (on which she was originally ticketed) was seat 22F. At least they moved someone else from 12B to business class and gave the third standby 12B.

My questions are a) how do they sort the standby list, and b) if it is by "priority code", can someone from FL educate us on what that is? Does your boarding pass indicate your priority code?