You are correct on the whole sequence you explanined, just be sure to have a pan to catch the fluid that will come out of the trans when you pull the output shaft out.. as far as how tight to put the nut back on, cant really anwer that question...it doesnt have a crush sleeve or anything in to to worry about messing up, so as long as its tight you will be fine, just dont crank on it excessively.
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