Everything I've seen (except the Carrier pumps that will actually "lift" fuel) has been mounting on the frame rail right at the tank selector valve. *Most* electrics are pushers, not pullers so below the fuel level, and as close to the tanks as possible.
Yes, it'll replace your mechanical lift pump. Pull it out and block of the hole with a big block Chevy block-off-plate.
I used a cheapy ($35ish) Mr. Gasket electric on my old 6.2 Chevy and it worked fine. When I do my Ford I'll either go with one of those Carrier pumps or the Holley Red.
Mike