You're basically right, but only to a point.
Teutonic Knights were a religious order (even if one of sort), and their effort was not to exterminate for the joy of bloodlust, but rather to impose Christan faith (and quite incidentally, their rule).
What I am trying to say here is that the "original" lebensraum concept was something like the colonialist mentality in the 1800 Europe: we are going to conquer them for their own sake, to give them civilization.
"Polish Economy" was another way of saying "Hut-living Savages".
This did not rule out extermination, but only as a (limited) tactic to ensure conquest, rather than as an aim
The "extermination" policy as an aim came later, around 1942
Ah, I see. Yes, I think you're right on that. Although, I think the Teutonoc Knights followers and supporters probably had a slightly less religious motive.
I seem to remember that at some point in 1940-41 there was a plan to move all the European Jews to Madagascar, to a) cleanse Europe and b) create a new foreign market for German goods (although why Jews dumped on an admittedly large island in the Indian Ocean would buy German goods is another matter!)