Thoughts on Thesis #5
#5
The pope has neither the will nor the power to remit any penalties beyond those imposed either at his own discretion or by canon law.
Simply put, Luther is cutting to bone many practices of the catholic church. This is not simply the practice of selling indulgences but the whole usurpation of Christ’s role as mediator (1 Tim 2:5) and judge (2 Tim 4:1) and it’s replacement with the Pope.
Luther grants the pope his purview, but that purview does not include things explicitly granted in the Bible to Christ. While this is the beginning of his objections to many of the Pope’s practices, Luther is still loyal to the structure. Luther later on would drift further from this initial support of the Catholic church, but this is a gradual development from this initial thesis.
Peace.

More reading:
Johann Tetzel
Indulgences
Pope Leo X