what's the conventional way to do this (like a line input selector to select one of many to be the active output)?
one relay per input all connected to the same output rail, and make sure in your PIC code no 2 or more are ever both on? Any loading issues with this method?
For n-inputs, one-output, the conventional solution would employ a SPnT rotary switch. :P
Use a transistor to buffer the µC output if it's driving a relay. Otherwise you plan sounds fine.