I haven't done many of these, I really need to do more.
Andrew, To answer your question the setup is correct, and there are many ways to merge the photos.
I use a program called Autostitch. Don’t use polarizers since the different sun angle will mess you up.
Also lock the white balance and exposure so you do not have to mess with them, they'll never match up
right in the end. I suppose you can correct white balance in a raw workflow.
Here are a couple of mine.