Am I correct in assuming that Mic provides power to the mics from the D70 and Mic+phantom switches to external phantom?
No - MIC means that the input is set to mic-level (as opposed to line-level) but without any powering. MIC+PHANTOM activates phantom power through whichever XLR jacks you activate it for. If you're using an external preamp, you'd want to set the input to LINE. If it's only an external phantom power device and not a preamp that adds gain, you may find MIC would work, but certainly do not use MIC+PHANTOM unless you want to power your mics directly from the 70D.
2manyrocks is correct that it's a little cumbersome to have to go through two different menu trees to do the relevant settings of channel enabling and phantom powering, etc. BASIC and INPUT are the ones we're concerned with. Here's an example of two different kinds of mic powering scenarios where that gets a little confusing:
1. If you want to connect a pair of phantom-powered mics directly to channels 1 and 2, you go to BASIC and then set INPUT 1/2 to XLR/TRS. Then you exit out of there and go to INPUT > INPUT GAIN and set it to MIC+PHANTOM to power said mics. You also need to go into the MIC menu to check that you've set it to provide 24V or 48V phantom, but that only needs to be done once assuming you always use the same voltage.
2. If you want to connect a pair of PIP-powered mics terminated to a 1/8" stereo plug (Church Audio, Darktrain/tgakidis AT853s, etc.), you go to BASIC and set INPUT 1/2 to EXT IN (if using a battery box) or EXT POWER to power them directly from the 70D. You do not do anything in the INPUT GAIN menu when dealing with that EXT IN 1/2 input with respect to powering the mics.
In practice, the PIP voltage the 70D is too low to get good performance out of most PIP, mics and you'd be better off with a battery box (in which case you choose EXT IN). But it is a little strange that you activate PIP powering for the 1/8 input in the BASIC menu, but phantom powering for the XLR inputs in the INPUT menu and the choice of voltage in the MIC menu. Perhaps these things are purposely separated so one doesn't change them accidentally.