That is the only way to do it manually. But you are going about it the long way.
When you log into the ACP go to the index page, YOUR.com/admincp/index.php and you will see a block titled, Welcome to the vBulletin Admin Control Panel now in that block you will see on the right side, Users to Moderate, click on View next to that, there you can approve the members.
They should get a PM that their account has been approved after doing that.
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