This common example is perhaps the simplest way of thinking about it. Read through it. Then read through it again and think of yourself as the sinner, the father as God the Father, your brother as Christ, and your friend as a fellow Christian.
Sin is like hitting a baseball through your father's window. You can run and ask forgiveness of your father for your folly, and if he is a good father, he will forgive you.
But there is still a broken window on your father's house, and by strict rights, you ought to repair it, having broken it.
Now, your father might be generous and say he will take care of it himself, or have your especially generous older brother take care of it for you. Your father might also ask that you repair it, since this is the fifth window you've broken in two months of playing baseball in the backyard, and didn't he ask you not to play baseball back there anymore after the first broken window?
Should this latter situation be the case, you might pay and repair it yourself, or perhaps your friend or generous older brother might give you the money to repair it and hire a repairman.
Whatever happens, one thing is certain - your father doesn't want to live in a house with broken windows.
An indulgence is a payment of the penance required for sin, and the payment comes from Christ and the Saints in view of your own contrition and attempts to make up for what you have done. An indulgence can only be gained by one who is contrite for and detesting of their own sins for which they are gaining the indulgence through the spiritual act. If you are not contrite, you are hardly deserving of benevolence on the part of Christ and the Saints. On the contrary, you need that much more penance. If you are contrite, the Church feels you deserve a speeding up of the fullness of the mercy of God by applying extra merit, so to speak, to the meritorious penances that you perform to gain the indulgence.
This is why the Church does not (and cannot) merely hand out indulgences for nothing, but demands that they be connected to both outward acts of faith, and inward contrition for sin.
There is a story I was told about this that is directly related to the concept of the spiritual acts needed to gain indulgences forgiving or shortening penances.
A man goes into a confessional for the first time in 20 years. He has a long list of grave sins to confess, and does so with much sincereity and contrition over the lamentable life he had been leading. The priest listens very patiently, gives him a penance of 10 Our Fatherss and 10 Hail Mary's, and starts to absolve him. The man interjects: "But Father, I have been such a wretched sinner for 20 years - Surely I deserve a greater penance!" The priest thinks this over and decides the man should only say 5 Our Father's and 5 Hail Mary's. The man can hardly believe it. He protests again that he has been a worthless sinner who has greatly offended God, and begins to weep as he again recounts some of his worst acts, and how unworthy of mercy he is. The priest thinks this over again, and says to him, "Okay, okay. Your penance is 1 Our Father and 1 Hail Mary. No I absolve your from your sins, etc. Go in peace my child, your tears of contrition and protests of unworthiness have healed your soul and pleased God far more than any penance I could give you to perform."
It just doesn't fit well with the story of the Prodigal son, imo.
That is the legalistic mindset of the west -- sin is something akin to breaking the law, rather than rejection of God. There is no love in it -- but simple (dis)obedience.
Along with that come the "canons" or laws and all the legalistic scholasticism of the west. And the more the Orthodox subtly succumb to it, the more they are drawn into the scholastic debates, where the focus is finidng the "correct" passage or quote rather than concentrating on how ungrateful we are to God.
It's not about our relationship with God, but about "pay, pray and obey."
"An indulgence is a payment of the penance required for sin, and the payment comes from Christ and the Saints in view of your own contrition and attempts to make up for what you have done."
Real basic difference here between the Latin Church and the Eastern Churches, HC.