Is this the correct approach for installing 3/4" Hardwood floor?
I have seen 3/4" thick hardwood floors go over 1/2" subfloor with no problem. Your floor structure is plenty heavy to carry any load you apply to it. In many older homes (really old homes) there was no subfloor at all, and the floors held up very well.

Remove the layer of MDF, clean up the nails, and reset all the nails that are in the subfloor. This minimizes the chance of squeaks from the nails that may have risen up as the framing dried and shrunk. Add 1 5/8" screws at all the edges and 3 or 4 more spread across the center of the spans of all the plywood. 

In my humble opinion, DO NOT use an underlayment foam under hardwood flooring. This is only intended for floating floors!!!!. The "give" the foam has, is asking for your floor to squeak!!! The only vapor barrier you need is a 5 lb. felt paper. It is much lighter and much thinner than roofing tar paper and will give the resistance the wood needs against moisture rising from below. This is what is used in all new floor applications. Sometimes, on occasion red rosin paper is used too, I believe it is error, it has no resistance to vapor permeability.

After this initial bit of prep, lay your new floor.