Seems like a sensible idea to me, but I would raise one possible risk that I hope others more knowledgeable can weigh in on. Will the presence of all that rotting underground wood invite termites close to the house?

I'm not worried about termites, which aren't much of a problem here. The foundation is poured cement and there is brick under the vinyl siding. I've been mulching with cedar mulch for many years. I do expect I'll get some ants.
Here is a current picture. I'll be filling this in in the spring by dividing a whole lot of other plants I already have. Black eyed susan, Shasta Becky, Sedum autum joy and other low maintenance, along with some groundcover to hang over the edging, like the Plumbago that's already there..
That's a magnolia on the left. I plan on a daffodil bed there, and a whole lot of geum Mrs Bradshaw (for later) that I need to split. Of course, I change my mind on a daily basis. :)

That bend near the drain isn't as awkward as it look in this pic.

I put in a garden with my niece at my sister's house, and something like 5 years after her arborvitae (Atlantic white cedar/Thuja occidentalis) were removed the stamps were virtually unchanged, so be aware that they will be there for a long time if that is what your cedars were. I wouldn't expect that they will interfere with your plants however. Looks better than previously.