I think it’s a matter of terminology but I think we can call penance a form of punishment. As you said, its a means of offsetting )or wiping out) our temporal debts. It’s like the story of Zacchaeus where he said that he would “pay back four fold” anyone he defrauded. That’s a great example of penance – repairing the damage of sin and doing extra punishment (not just giving back what was stolen but doing more).
Regarding the OP, I think penance pays back the temporal debt and thus reduces our purgatory.
A wise person will pray daily to try to remit their temporal debts and work on trying to gain for themselves and others as many full or partial indulgences as they can over their lives.
Sadly, since the Protestant Revolution there has been less practise of indulgences since many Catholic have fallen away from this practise. This was a major injury of the Protestant Revolution and we should pray for others and spread the word about how important indulgences are.
I fully agree. I like your signature as a great reminder of this important part of our faith. I’ve been striving for more indulgences. There is a fairly easy one (in a place where there are a lot of Catholic churches like where I live) where you can get a plenary indulgence by visiting a church on its patronal feast day.
There are some indulgences for the Year of St. Paul also that we can all get.