Your explanations are basically correct, but there is more to this problem than meets the eye. The solubility of ehtanethiolethanethiol in water is actually not all that low.
The data in this question actually corresponds to more than $0.2$ molar, and even the more conservative result given in WikipediaWikipedia ($0.7$%) exceeds $0.1$ molar. Sulfur has about the same electronegativity as carbon and we would expect the solubility of ethanethiol to be similar to that of propane based on your explanations. But on a molar basis ethanethiol is about $100$ times that of propane using the data in Wikipedia.
Although sulfur has about the same electronegativity as carbon and thus compounds of sulfur, carbon and hydrogen are expected to be largely nonpolar, the sulfur atom being larger makes it more polarizable: it and bonds to it will generate induced dipoles more readily than carbon in a polar environment such as water solvent. So replacing a carbon in propane with a similarly electronegative but more polarizable sulfur makes the thiol more soluble than propane. A similar effect appears in this table when hydrogen sulfide ($\ce{H2S}$) is compared with methane ($\ce{CH4}$).
Of course this polarizability effect is not enough to match the effects of a permanent dipole and strong hydrogen bonding from ethanol, and so we have the solubility order
$\ce{CH3CH2CH3} << \ce{CH3CH2SH}<< \ce{CH3CH2OH}.$