Hi,
Yes. In that case, you want to turn off the display of the custom field in the email (with the settings of the custom field), and then indeed use such {LINEVAR:product.XXX} tag in the HTML of the email to add that custom field value.
What you describe should work, so I'm thinking you did an error somewhere.
Could you provide a screenshot of the settings of that custom field, and a screenshot of the area where you did the modification to add the tag in the email edition page ? That way, we'll be able to better understand the situation and see if you missed anything.