If the TOC tool includes the option to sort entries alphabetically by title (or n my case, the figure caption), then yes, that would work. Normally, however, TOC is presented in order of page numbers.
You are completely right. In order to use the TOC tool to generate an index in InDesign, you need to check the "Sort Entries in Alphabetical Order" box:
There are many third-party indexing scripts and plugins out there, varying in quality and price. This article (and its accompanying comments) from InDesign Secrets looks to be a good place to start reviewing your options. I like Peter Kahrel's Index from character styles.
Oh, GREAT, then I can actually use the TOC generator for my index. and that is likely what I had also done in v. I.