Yes, you have it correct. The LLCs are for legal purposes only since they are disregarded for taxes. The top LLC name and EIN number are on the return and you report all activity under the one business return (as if it was incurred there).
Select we rent real estate to others, even though it's indirect, because it's the nature of at least some of the activity you are reporting (if not all). You can select more than one type of business activity.
If your top LLC is providing management type services, then you could select services as well but you shouldn't include any transactions between the owned LLC. These selections will determine the types of partnership activities for flow through income and expenses. Rental is passive and the other types are active business.
If you use more than one, you'll be prompted to enter related income and expenses for each and you'll need to enter your K-1 twice on your personal return, for your share of both activities.
