Right.
Point 1 is the internal HD. Point 2 is the last device on the SCSI chain, which in your case would be the SCSI Zip drive. Setting the Zip drive's switch will enable termination.
To go further, if you were to connect, for example, a CD-ROM drive too to your SE/30, after the Zip drive, you would disable the termination switch on the Zip drive, and use a terminator block on the CD-ROM drive's 2nd SCSI port.