You need to put the .css file directly into the extra_theme folder. As for documentation and how to make them I didn’t find much myself so I did some trial and error with another person’s custom theme. I’ve got some commented stuff at the bottom of our instance’s theme if that’s of any help.
That looks correct to me. Try doing a Ctrl+F5 on the theme selection page in settings for it to show up in the dropdown if you haven’t done that.