LOL, yeah, you managed to ask for the summation of machine programming, digital logic, computer architecture, and VLSI all in one question. 🙂
Here's a small stab at it...
The instruction set defines the machine instructions that the CPU can directly understand and execute. All high-level languages used to program applications, games, and OSs; C/C++, Java, Pascal, etc; have to be compiled into the assembly language for the particular CPU's instruction set (not quite true for Java, but that's a different story altogether 😉). All the executables you run on a computer are compiled and assembled into machine code.
Starting from a RISC perspective (because IMHO its easier to start with), there are three basic classes of assembly instructions:
Arithmetic/Logical: These perform arithmetic (add, subtract, multiply, divide, etc) and logical (AND, OR, NOT, XOR, etc) operations on operands and store the result in some location. RISC CPUs classically only perform operations on registers....these are a small number (typically 32 for RISC) of temporary storage locations in the CPU.
Load/Store: these are memory operations that load memory data into registers, or save a register to a particular memory address.
Branch/Jump: Normally, instructions are conceptually executed serially...the instructions are kept in memory, so the instruction at address N is executed, then the instruction at address N + 1 (well, N + 4 for 32-bit instructions, but nevermind that), then N + 2, then N + 3, etc. But sometimes you want conditional structures: ie, if register $t1 is less than 0, execute this block of code, if not, execute this block of code. Or you want to have while loops: while register $t3 is greater than 3, keep on executing this block of code. To accomplish this conditional execution, you have branch and jump instructions that jump the execution flow of the instructions to some specified address.
<< Is each basic command a separate transistor path on the CPU? The arrangement of the transistors physically perform the command? >>
The simple answer is that a lot of structures on the CPU are used for every instruction. Many basic (very basic) steps are repeated for each instruction: the instruction has to be fetched from memory, it has to be decoded, its registers have to be fetched, its executed, then the results are written back to memory or the register file.
In modern superscalar processors, the effort is to dynamically schedule as many instructions as you can per cycle, so to accomodate for bursts of instructions, the execution logic is divided between the classes of instructions; there may be a few integer arithmetic/logic units (ALU), a few floating-point units, a few load/store units, etc. But even similar types of instructions are going to share the same logic....there may be a number of different ways to do an add operation: signed or unsigned, using registers or memory locations, etc. For example, two typical RISC add operations might be:
add R1, R2, R3
which performs R1 = R2 + R3, using any three specified registers, or
add R1, R2, immediate
which uses a constant immediate value specified in the instructions, such as add R1, R2, 4 which does R1 = R2 + 4.
There's no point in unnecessarily duplicating the ALU for each type of instruction, so in front of each operand input port to the ALU might be a multiplexor (or probably some sort of bypass network with today's CPU), which acts as a sort of switch....a multiplexor, for example, may have 8 inputs and one output, such that a control signal selects which one of the inputs gets passed to the output. Thus, depending on which instruction is issued, the control inputs will effectively select which type of instruction the ALU will perform.
This is just a SMALL part of the whole picture....if you want to know more, check out a copy of Computer Organization and Design by Patterson and Hennessey....it's the undergraduate version of their graduate-level text, Computer Architecture. I don't know if its too high of a level for you (can anyone suggest a more basic text?), but it effectively covers computer architecture and the machine programming and digital logic knowledge required for the text.