If you copy Increasing Confusion or any other "cast from the graveyard" spell with Increasing Vengeance, does the copy act like it was cast from the graveyard? Or, since the copy technically was not cast from the graveyard, would it just have the normal effect?
Your instincts are correct. Copies of spells are just placed on the stack, they are never cast.
706.10. To copy a spell or activated ability means to put a copy of it on to the stack; a copy of a spell isn’t cast and a copy of an activated ability isn’t activated.
The copy a spell and cast a spell actions are distinct and unrelated. A spell created by Increasing Vengeance was created by a copy action, not by a cast action. If that spell was Increasing Confusion, its replacement effect doesn't come into effect since it wasn't cast (from the graveyard or otherwise). This is specifically covered by the rules.
706.10. To copy a spell or activated ability means to put a copy of it on to the stack; a copy of a spell isn’t cast [...]
Compare with Spellweaver Volute, which copies cards you then cast (from the graveyard).