Yes you're right Sam, teachers and parents often say:" If you don't toe the line, there will be serious consequences". Sports coaches and managers also use this idiom: Coach: Hey guys, I expect everyone to toe the line when we go interstate for the grand final. We don't want our club to get a bad name. Manager: It has come to my attention that some of our employees aren't toeing the line and are using company time to send private emails. This has to stop immediately!

Brett, do you normally hear the phase "toe the line"? I don't. To add some more meaning to it, you can use it talking about sport. That indicates to get ready at the starting point.

Yes that is fine, 'toe the line' means to obey the rules or conform to standards. 'We all should...' is correct but rather formal, it is more common to say 'we should all...'