Essentially, yes.... But again, not quite. CLOUD SWORD is NOT meant to be arrived upon by anagramming! At least, not in the conventional sense.
Okay, broken down as much as possible.
"With a sidewards glance should your path unwind." This means look at the letters down at the side of the riddle to arrive at the answer, CLOUD SWORD. As you will notice however, if you look at the side of the riddle, it does NOT spell CLOUD SWORD, it spells DSCLRDWOOU. As I have said that anagramming is not required, and you have a missing step before the sidewards glance line, it should, in my opinion, be fairly clear what this missing step entails.
EDIT: musenji, if you have anything to add to what I've said, go for it. I'm trying to give as much as I can, but I can't think of how to point them to the actual solution yet without outright answering parts of the riddle.




