I'm not sure I understand your question, or rather I'm not sure how the second sentence is related to the first.
Formatting a partition will erase everything on it. So if you format the system partition that will erase your android ROM. Operations which require formatting system, such as flashing a new ROM using recovery or restoring one from a nandroid backup, will do this as part of the procedure, and hence you would not normally format system yourself.
Flashing "boot, fastboot, and splash" are not the same thing. "Fastboot" is a utility you can use to flash different partitions, not something that you flash to the phone. So you could install a new recovery using the command
fastboot flash recovery recovery.img
Here "fastboot" is the utility you are using, "flash" tells it to install an image to the phone, "recovery" tells it which partition to reflash, and the last argument is the name of the image file you wish to install. To flash a new kernel you would use
fastboot flash boot boot.img
So what makes the image go to the right place is the second argument, the partition name. So it's important that you flash the correct image to the correct partition, or bad things would happen.
You could indeed flash a new ROM image this way
fastboot flash system system.img
but custom ROMs are normally distributed as zips which you flash from recovery, rather than images which you flash via fastboot.
Hope that answers the question.