Yep, that's a valid setup. I'd think that you're correct about using line level, too, but that's not always the case, so try both. If it doesn't clip on GTR/AMP, then use that… you'll have a hotter signal into the TF and less noise. If it does clip, though, line level is the way to go.
Just FYI, line level is not more noisy or less quiet than guitar-level. However, feeding a guitar-level signal into a line-level device can introduce more noise. The idea is to use the proper level for your signal, which is generally as hot as you can get it without clipping.