Yes, you need to engage VNAV. It will arm VNAV path. You then lower your altitude and the AP should start the descent once you pass TOD. Once you get close, your relationship to the path is shown on magenta where you’d usually see the glideslope on an ILS approach.
The crossed-out altitude means it can’t make the restriction. It either conflicts with something else or the angle would be too steep.
Note that you can always catch up to the path with vertical speed mode. For example, if you’re too high to intercept the path you can come down with an higher V/S until you’re back on path.
Google G1000 NXi VNAV tutorial. There are plenty resources that explain the details.