I’ve seen lots of debates/arguments about this on the PMDG forums, and it is likely somewhat company-dependent. I think the “correct” procedure is as you describe - set the minimum altitude, then turn off the automation somewhat before then to fly it in manually, while adjusting to go around altitude as you’re flying the landing.
But one of the agreed-upon takeaways from the discussions I remember, I understand that APP should be set for an RNAV approach, which should change the FMA to read “G/P” (Glide Path) in place of “VNAV SPD”. For all intents and purposes, it will look a lot like an ILS approach complete with lateral and vertical guidance.
This is a close crop of a screen cap I posted yesterday afternoon and it’s been compressed into mush by the forum software and subsequent cropping/editing. but you can get the gist of what you should see once the APP is actually flying the approach:
