1. The best way to make the connections between the motor and esc is to hard wire them. Solder them together without connectors. Most do, however, use connectors because it makes maintenance and other things easier to deal with. I've had good luck using the 5.5mm connectors. They have a good bit of contact surface area and have worked well for me. Put the female ends on the esc. That way, if anything does come loose, at least is won't short out.

2. I think that the motor to the rear configuration works the best, but it depends on the way that you set up your suspension and the way that you drive.