coolant and heater connections SBF

[Legendary]

I have been reading up on connecting up the heater up to a BPE 302. lots of posts on removing one of the connecting barbs and capping it off. Still not 100% sure I have it right..
So I am planning to connect the factory five vintage heater to the BPE 302.
Seems like I need to connect the ports for the bypass (ports 1 & 2) I was thinking since I will have a heater that I did not need to do that. Then again I am rookie, and don't now what I don't know.
Then I think I need to move my temperature sensor (just for the gauges) to the other side of the engine and attach one of my heater ports there.
Then the return line goes to the port 3

Does this seem correct?

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