Rotten Sill Plate

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Yeah, you can do it pretty much as you stated. You will need to jack up the floor joists enough to remove the weight from the rotten area of the sill plate, but you don't want to actually raise the floor enough to crack the plaster/drywall. Be sure to spread the jacking over 3 or 4 joists by using a beam across them as you jack. Cut the old damaged sill plate out with a Sawzall. You may need to bore a starting hole for the sawblade. Drive out the old plate and hammer in the new pressure treated replacement. Release the jack/s to lower the weight back down.