The recipe sounds like how I make home-made yoghurt for everyday use, except that I don't bother to heat the milk, I just mix in the plain yogurt (about 100gm to 1 litre milk) in a sterilised tub and sit it in the yoghurt maker (which I think holds the temp at around 35 deg C - haven't ever measured it) for 8-10 hours then pop it into the fridge until I want to use it. It's normal for a good amount of whey to separate out, leaving a thicker, creamier yoghurt which is just what I like. The dog gets the whey, we get the creamy yoghurt. To use in cheese, you can mix the whey into the creamy bit.
I've used this homemade yoghurt to make a hard cheese (didn't realise at the time I was using a thermopilic culture!) and it turned out pretty good - it was my first attempt, when I had no 'proper' cultures.