Yes, that’s the return. If you do as you describe plus a few sweeps left to right the system should be bled, flushed and PS fluid renewed.Is that top hose I removed from the reservoir the return? I have that hose disconnected and now flowing into an empty container when the engine is running and I've been keeping it topped up so it doesn't run low
Once all is functioning set the oil level in the reservoir to the correct level for Cold once the system is shutdown and cold.
Not critical but if at a later date you want to check to see if you have a leak it’s an easy reference point.
Renewing the PS fluid periodically can only improve the system reliability, it’s a closed loop system without any stock filtration other than the reservoir strainer.
Ref’ previous posts - Last point is to ensure that the newly fabricated hose material is compatible with the PS fluid. I’ve had incorrectly spec’d hydraulic hoses dissolve in a few days, just to be sure that the person you went to for the new hose has got it correct.
I can't even find a used one on Ebay or at the local VW specialist scrappers near me.