For the first half of your question, yes, you just create a "Group" channel, then you select the channel output on your audio or instrument track to go to that group for the sub-mix.

for your second half, I'm not sure if Cubase's mixing matrix allows you to do this. When I try to change the output of my Group Channel, it will not allow me to select anything but the Master output.

I think it might be possible to change the input of your "Audio In" track to accept the group channel, but it might have to be through the Sends/Return matrix.

I would like to know if anybody else has an answer for the second part of your question.