Yes, you're right about that. Picard makes it sound like it was just a story or a bunch of rumors, but I'm curious as to why Starfleet didn't at least check into it. Did they not want to contact the Romulans that badly that they just ignored rumors that missing Starfleet officers could possibly be alive?
(Honestly, I think this is just an oversight by the writers of "Redemption." The fate of the Ent-C should have still remained a mystery. That would have made Sela's existence that much more mind-boggling to Picard, and why Starfleet didn't look into the Narendra III incident further).