I’m not sure how the in-sim ATC handles ILS approaches as I’ve never used it, but this is how it typically works.
You would fly your STAR, and then transition into your APPROACH. Depending on many factors, your STAR may just naturally transition into your Approach (the final fix on the STAR is the first fix on the approach). For those types of landings, I would activate the approach at the transition fix (transition from STAR to APPRAOCH).
That type is pretty straight forward.
The other type, that I tend to fly more often then not, there is a discontinuity between the end of the STAR and the start of the approach. This requires ATC to vector you to intercept the localizer and this is typically done at a 30 degree angle.
In this example, I would fly the STAR and make the right turn at VERKO in NAV mode
From there, I would switch to heading mode, knowing ATC is going to give me a left turn to intercept the localizer.
This is for runway 24L so I know that my turn will more or less be 270 degrees. (240 runway heading, + 30 degree intercept = heading of 270). Again, not an exact science but gives you the idea.
When I make that left turn, and the plane levels off, that is when I would activate the approach. The plane is flying a 30 degree intercept, the localizer is tuned and now approach is activated. As I enter the localizer path the plane will capture and turn in.
These examples are ones I fly in airliners but the principals work the same in GA.
I hope that helps.