Yes, the sideways watermark is for horizontal format stamps this size. Remember that watermarks are part of the paper sheets used for printing. Unless the printing sheet is perfectly square (might be, might not be in this case) then it makes sense that the stamps would be laid out and printed in panes arranged sideways relative to the upright designs in order to get the individual watermarks to still fall on individual stamps.
The sideways watermark is mentioned in the Stanley Gibbons Commonwealth catalog. Since your interest seems to be in older stamps, there is a PDF version that runs 1840-1950 and is really reasonably priced. You'll probably still have questions in any case (we all do), so keep posting.