SQL Server log file in “Simple” recovery model

Can someone please shed some light on log growth in simple recovery model. If I understand correctly, even in "Simple" recovery model the transaction log can grow? So if I have open transaction(s) (Update, Insert, Delete, Index Rebuilds, etc.) these start to re-use inactive VLF’s and if none are present the log will start growing based on log configuration until it reaches the configured size or hits disc space available limit? Can any of the active VLF’s be marked as "inactive" due to a checkpoint and\or full backups?

In short, it was requested that I change all databases to "Simple" recovery model and issue a "DBCC SHRINKFILE (N’LogName’ , 0, TRUNCATEONLY)" every hour. I received a Error 9002 and the Full database backup and dbcc shrink failed. I guess, eventually, the transactions completed and the checkpoint, full backup and dbcc shrinkfile were able to complete.