Right on both counts..
The usual method would be to use External Instrument on an Instrument track, sending the MIDI out to the Sub 37 and setting the audio return to the extra interface input(s) you've plugged the 37's audio out(s) into. The MIDI performance gets recorded on the Instrument track, with the audio in playback coming in live via the External Instrument plugin.
Normally for studio use I *would* turn Local Off on the Sub 37, to make sure there's no accidental double-triggering. (Just remember to turn it back on before you pull the 37 out of the studio for a gig).. :-)
And don't forget -- with live audio coming in from the Sub 37 in playback, you'd have to Bounce in realtime, unless you decide to patch the Instrument track into an Audio track and record it..
The video below discusses all of this, starting at around 2:20..