The wash instructions on the *shirt* aren't necessarily the wash instructions for the iron-on though. The seller should have given you a printout or something. BUT, the instructions you listed sound pretty safe. If in doubt, dry it flat rather than putting it in the dryer.
And yeah, totally try making your own iron-ons.
My advice, try to avoid the "cheap" poly-cotton blends, like you can get at Michaels. More cotton=good.