The Custom Organ Design Module (CODM) organ definition format is definitely the one to use (the 'full' ODF format is extremely complex and aimed at professional sample set producers).
The full documentation for the CODM ODF format can be found, along with usage instructions, can be found in the Custom Organ Design Module user's guide on the Help menu in Hauptwerk. If you haven't done so already, start by having a read through that guide, and trying some of the example CODM organ definitions, as covered in it.
Can I use encrypted organs (which I bought so have the key) in a new organ definition?
Yes - the CODM fully supports encrypted samples, as long as the sample set producer's licence allows it (all do, apart from OrganART Media, as far as I know).
There will also be some enhancements to the CODM format in the forthcoming Hauptwerk v4.0.0 (we'll cover that when the release is ready).