Under the right side (as you sit on the bike) side cover.
You can, but it will require cutting and adding framing on the front and lower part of the engine cradle. It's really not worth the trouble unless you have lots of frame and design experience. Sorry.
Yes, it will fit and do fine! 1986 - 1991 are the same cranks.
Behind the right side cap (opposite the filter) Behind the right side cap (opposite the filter)