You basically have it right but you do have to do a few other things like add a MalePlayer and a FemalePlayer character, global them, and add them to the scripts. They also have to be scripted to teleport between the creation screen and cyseal as that's what trips the creation screen GUI to load again.
Also I don't use the existing henchmen, but use those added Male/Female player and add them to the companion database.
Far as adding them as "players", that's also do-able. The old version on classic worked this way. I elected to make them companions just to help ensure stuff doesn't break. Though the "companion" versions in my mod actually do get set as "isplayer" but the MakeCompanion procedure from main is what does it.
I'm pretty sure the IsPlayer property only dictates whether you can actually control the character. There might be some things hardcoded I'm not aware of though. But there are databases for them as either players or companions which dictate how the scripts handle them.
