Your pic. is only 135 x 180, so doesn't show much, but the hose from the back of the head goes to the lower stub, and the one to the upper stub comes from the 'tee' hose.
Yep, you have the hoses the right way round. Remember that the system needs lots of bleeding, so if the heater blows cold you probably still have air in the system.
I bled it again at the rad but still no heater. Fixed it by disconnecting the top hose shown in the pic until I could see a stream of coolant then reconnecting it.
I noticed that at idle the flow was barely a trickle but a blip on the throttle and it seemed fine. Is that normal?