Density isn't exactly created per se, but you have the general idea down.
When materials are heated, they expand, increasing their volume, while leaving their total mass unchanged. This of course results in a decreased density.
However, this expansion can be counteracted by a large force. The immense pressure exerted on the core of the Earth acts in this manner, compressing the metals composing the core into an extremely dense ball.
In the mantle, however, the pressure is not great enough to force the magma into a solid state, and thus, it is able to flow. Because it can flow, hotter magma, which will be less dense, will rise, and cooler magma will sink.
To sum that up, both statements are true. The Earth's core does get hotter and more dense the deeper you go, and the convection process does occur because the heat of the core lessens the density of magma nearest to it, which causes it to rise, and then when it cools, it falls.