Yes, that is correct. Your timeline is the sum of all feeds listed on the Edit Sources & Cross-posting page. If https://microblog.willtmonroe.com/categories/blog/feed.json is the one and only feed there, those are the only posts that will show on your timeline.
Please note, though, that if you’ve had other feeds configured in the past, your timeline might still show posts from those old feeds. You will have to manually remove those old posts from your timeline if you don’t want them there.
In addition to posts from the feeds you add to the Edit Sources & Cross-posting page, replies you make will also show on your timeline.
The short answer is no, Micro.blog’s timeline display rules do not apply to other places on the web. It’s up to every single Fediverse software out there to decide how they want to present posts. Often, though, you can expect posts to show up similarly to how they look on the Micro.blog timeline.