Kudos on the system diagram. Rep points for that!
Pretty much what you said, yes. Except the Output is still right and left going to the next amp (the 4 channel going to mono amp in your proposed setup). The line output converter usually will have 4 wires going in, and then a set of RCA out (right and left). Fade and balance is a bit different on the mono though. Are you using two line converters? The 4 channel should have four inputs (Right and Left for Front and Rear). Most 4 channels will only have the single output that acts as a combined signal (almost like they had adding a subwoofer amp behind it in mind
The volume will be controlled equally for both amps, yes. However, some mono amp manufacturers will have a Bass Boost knob that can be mounted near you for those times when you want to crank up the boom. I never recommend using the Gain as a volume control. I have always went by what I was taught, which is turn the Gain down on both amps, turn up the volume on the head unit as loud as you want it, then start turning the Gain up. Once you hear distortion from the speakers (or it is just ridiculously too loud), then you back the Gain off a bit, and it's all set.