Nice to see you here in the taverne!
In fact, I tink there are as many ways as fan-legends in the forum and there is no "right" or "wrong" way. If it works, it's fine

Your way is just one of many and, depends on the legend, a good way to adjust the difficulty.
You can also adjust the difficulty withe the strenghtpoints of the creatures or the number of them. For example two more Gors with 4 players. Or the dragon with 40 than 30 SP.
If you can search other players for testing you legend. Maybe they find mistakes or things you don't even notice, because it's your legend and everything seems clear.
The number of test matches... I think, some of the legenends in the forum had more tests than others. In this point, it depends on the writer, how much time he wants to spend in the process.
At the moment, I work with Troll and Butterbrotbär on a special legend for Arbon and I can't say, how much tests we played in the last months. I think it must be something over 20 or more?
There is no number, on wich you can say: it fits and it's perfect.
Sorry ^^
If you are on the point where it fits for you and you can say: YES! Others can play it now without problems! Then it's the right moment

But this is only my opinion. Maybe it helps you a little bit!
Greetings,
Cat