You are correct.
EU: "The free movement of goods is one of the four fundamental economic freedoms laid down in the EU founding treaties, the other three being the free movement of capital, services and people."
https://eur-lex.europa.eu/EN/legal-content/glossary/free-mov...
> "The single market seeks to guarantee the free movement of goods, capital, services, and people, known collectively as the "four freedoms" "
https://en.wikipedia.org/wiki/European_single_market
The EU would welcome the UK being closer aligned to the EU, trade-wise. But the UK cannot be in the single market without all four freedoms. Which the UK still rules out.