Yup, you've got it. On the underside (the side you can see above), make sure you give the knee/transom seam a nice thick fillet and glass. Optional, but I like milled glass fiber in any thickened epoxy mix used for connecting to the transom or bow (or even fairbody) - these are stress concentration areas. Also notice that on the topside (the side that faces the sky), you can't put a fillet and glass because the blocking goes there ... OR you can, but you'll have to shape the blocking to match the fillet's curves and will likely have some fill to do. But it's not necessary. The epoxied-in blocking adds plenty of strength and that's why it's there.
As in the pic below, top side of the knee will get blocking that adds up to the thickness of the sheer shelves. You'll likely put plywood on top for corner storage areas (later) that will bring it up to the same level as the sheer decks (below).
Brian