Yes, that will give you a good smooth surface to glue your filler piece, also called a "dutchman".
Here's an alternative:
1. Crop out all the rotten material
2. Fashion some plywood pieces which you can use to sandwich around the damaged area of the door and coat them heavily with butcher's wax.
3. Paint the exposed surfaces where rotten wood was removed with epoxy
4. Add a thickening agent to the remaining epoxy and form a stiff putty
5. Squeeze as much of the putty as you can into the cut-out area, working it in with a small putty knife
6. Clamp your pre-cut waxed plywood pieces over the repair area — you're basically making as mold for the thickened epoxy — allowing excess putty to squeeze out and knock the plywood off with a hammer when the epoxy has cured. The plywood will help keep the original dimensions of the door and let you clamp without deforming the steel.
7. Sand the area smooth and paint