Well I had a successful brew day partly thanks to you guys so thanks! I learned a lot just reading through what you all have written and also realized my initial description of the problem was what confused many of you.
Like you managed to figure out, I meant to get a 'mini-mash' kit in the beginning but got the 'all grain' kit instead. It wasn't that I didn't have enough grain for the recipe and needed to supplement it with extract (like a mini mash kit does), but once I got everything home and realized that the recipe called for me to mash in a mash tun, etc. I panicked and came here. This was my biggest problem. I've never poured the grains directly into the water and had to filter out the wort from the grains because I've always used mini-mash kits that kept the grains a bag the whole time. When I came here I basically just wanted to figure out if I could still get all the sugars out the grain while they're all pressed together in a bag. In the end I realized that the solution was just a bigger bag.
At first I thought since I was supposed to mash the grains for an hour in the tun that I could just split up the grains (since I couldn't fit them all in the grain bag that I had) and let them each mash in the brewpot for 30 minutes. I learned in this thread that some of the enzymes need to mash a full hour to release their sugars and so my 30 and 30 plan was going to have to change to a 60 and 60 plan. Also many of you asked if I was mashing at 170, but I just meant I got the water to that temp before I put the grains in, so they really mashed at a lower temperature.
After each half of the grains had their 30 minutes of mashing, I eventually just went and got a 5 gal paint strainer bag, threw ALL the grain in the bag, reheated the wort to 170 and put the bag back in for an additional hour and a half to make sure I got as much sugar as I possibly could. I realized the main difference between my setup and the proper 'mash tun' setup was that my brew pot didn't keep the temperature consistently high and it ended up dropping to about 130 by the time the hour and a half was up. Though this also puzzles me because some of you said that there are certain enzymes that need a lower temp to do their thing, so it seems that the gradual drop in temperature is somewhat desirable.
So at that point I stuck my finger in, licked the now sweet wort off of it and continued brewing. By the end of the day I ended up with an initial gravity of 1.060 when the target was 1.055, so if I understand correctly that means I got even MORE sugars than I even needed (perhaps since I mashed the grain for almost 3 hours total).
So after all that I've got another question. What are the benefits of mashing in a tun rather than doing an all grain BIAB mash like I did? I realize time is one, as it took me 3 hours to do something you could do in 1 in the tun, but is there anything else?
Again thanks for all of your help. I had a blast figuring out exactly how to solve this problem today with you guys.