FMG,
Man you must be living right, for you to be able to get the wife to do all the Demo work and even busting up the concrete…Yep, you’re doing it right.
I agree with Gary. If the sub-floor is solid and will take screws I would use it. Here is what I have done in the past. I glued and screwed 3/4” plywood to the sub-floor,which you’re wife has exposed. I use long enough screws to hit the floor joists and structural construction adhesive. I try to turn the plywood 90 degrees to the existing sub-floor. This assembly will give you an extremely solid base to work with and will bring you’re new floor up to the level you should be without the ceramic tile. (IF I Understand the old floor correctly)
I then use Versabond type 2 thin-set, Available at hd, and bond the new ceramic tile to the plywood with it. The Versabond is made for bonding to plywood/concrete and works extremely well and provides a moisture tight seal to the plywood. Then just grout.
I’m actually doing that exact thing to our 1850 Gothic revival currently. Good Luck with it.
I have several different properties and this has worked well for me. The floors have been down for about six years now and no problems.