That looks correct to me. In case of interest here are some more details about OVN and DNS:
As you can see on default OVN will intercept DNS requests and tries to resolve local name. I’m not sure if it resolves just instance names it self or requires .incus at the end. Would try both.
Alternative create your own DNS as mentioned and liked above.
From the output above it doesn’t look like just instance name lookup will work as there is no default search entry in the resolve output. Try to use .incus at the end and it should resolve.