You should use sp_addlinkedserver 'name of instance'

You can only use a linkedserver as the source of the data (From Clause)

The insert should be done running your query on the server...

Maybe it could be usefull to do a select distinct into a new separate table.

Then you could use 'truncate table' and actually rename to the new table to the old...

Table variables are set into memory but also in tempdb!

This is one of the big msitakes people make and I found it in a lot of sql books!