Not stupid at all. It's just one of many ways of doing things. But tax-wise, it really makes no difference in the overall tax liability on your joint tax return. So I'm going to first suggest what I see as the "simplest" way, then I'll just make you aware of the 'other" way.
Since the business is in fact, a sole-proprietorship, and you two file a joint tax return, What comes out of the business account and into your personal account has no effect on anything and isn't reported anywhere. Hubby just completes the SCH C "as if" he puts all the business income in his pocket. Now as you're aware, in addition to the regular tax on that SCH C income, he also has to pay the additional self-employment tax.
Now that self-employment tax is not really a "tax" per-se. It's the employer contributions (hubby is his own employer) to the owner's individual social security account, and the general Medicare fund. With this method, only his SS account is credited for SS contributions, and in the future will directly impact the amount of social security income he receives upon reaching retirement age. You, the non-owner spouse, get no credit to your social security account.
Now since hubby is the sole owner, he can "hire" you as an employee. When starting through the SCH C section of the program, one of the screens has a selection on it for "Has Employees". Select YES, and then later the program will ask for the employee's information.
When all is said and done, hubby's business will issue it's employee (you) a W-2. He will also be required to withhold and pay the employer's side of "your" social security and Medicare to the IRS. If your state taxes your income, that gets reported on the W-2 in boxes 15-17 also. The amounts depend on what you as the employee are paid. Additionally, what he pays you is a deductible business expense. But that expense get's "cancelled out" on the joint return, when you enter your W-2 in the personal income section of the program.
Overall, your joint tax liability will still be exactly the same. The only difference is, money the business pays *you* gets credited to your social security account, and the Medicare fund.
Basically, the wages paid to you by the business are reported on line 26 of the SCH C, and that amount is not included in the business profits shown on line 31 of the SCH C. What's on line 31 is used to determine what get's credited to hubby's SS and Medicare accounts, while what's on line 26 includes not just your wages reported on the W-2, but the employer contributions to *your* SS and Medicare accounts.
So either way you go, when you have finished the joint tax return in it's entirety, the tax liability shown on line 63 of the 1040 will be exactly the same.
Note that if the business has employees, then the business is required to file certain paperwork with the IRS on a recurring basis. If you've never dealt with employees before, start learning at
https://www.irs.gov/businesses/small-businesses-self-employed/businesses-with-employees
