You should be able to do it like you said. You will want to set the workgroup name on the WD to match what is on your PC and I think you’ll have to use the same user profile / password (same as you use to log in to Windows), or create another user id on Windows just for the WD to use (I never had any luck with guest or Everyone access on Windows). That way you could limit access to read-only, for example, so 5-yo doesn’t delete everything.
When you go to watch on the WD, go to Videos, then select Content Source and choose Windows Share and hopefully your PC will show up. It may take a few minutes as I recall. You’ll probably have to input your user/pwd the first time.
Another way to go is to install a DLNA media server on your PC, such as Serviio (one that I have used but there are others) and then you will have a fancier way to do the same thing.
In any case you’ll want to get a current load of firmware on your WD box if yours has been sitting around for a while. 2.0.32 is the latest but some of us have had problems with that one and prefer the previous release, 2.01.86 (there are problems on that one too but, arguably, less for some people). I have one WD box on each and for doing what you’ve mentioned, just streaming videos from local network, both releases have been pretty stable for me.
Hope I haven’t forgotten anything important - it has been a while since I set one up.