That is correct...I remember the dialogue from Picard now he adds after the twenty years of war with the Klingons something along the lines or maybe it is the actual line "A Federation starship coming to the aide of a Klingon outpost...might've averted the last twenty years of war against them". I've butchered the line. It does seem though that prior to The Undiscovered County that the Narenda III incident was meant to be a fulcrum in the relationship between the Klingons and Federation. "Yesterday's Enterprise" is like the case for most fans probably my third favorite episode after "Best of Both Worlds Parts One and Two". I can't remember though...does Picard mention what happens to the Enterprise-C in the alternate timeline? The only thing I can remember is at the beginning of the episode Tasha Yar reports that the Enterprise C was lost with all hands twenty years (can't recall if she mentions how).
It was Wesley that said "that cruiser was destroyed over 20 years ago." Data corrects him by saying "Presumed destroyed." No one really knew what happened to the 1701C in the Alternate time line, only that she disappeared and was presumed destroyed.