You are correct. The formula calculates magic resistances before factoring in an elemental resistance. Furthermore magic resistances covers all incomming magic attacks- not just one specific element.
If you are working for maximum defense you should begin with magic resist enchants.
The elemental enchants are situational: Like if you were a vampire you might still want a resist fire enchant even with max resist- because you have a large fire weakness, or you might want to stack frost resist if you are going against certain briarheart camps and you are a melee build- to avoid the slow effect of frost.
You max magic resist at 85%. now if you have the max elemental resist as well since it calculates after- you basically will get about 97.5% (IIRC) max resist vs an element by stacking both forms.
Also- you could become a vampire- take atronach stone, and get atronach perk in alteration, and be immune to any/all magic.