I just went through a lot of this with my street car. I run an iron headed 408 in a 3650+lb challenger (et's are in my sig). I left the battery in the stock location just to keep the engine compartment looking stock-ish. Doesn't seem to hurt the car since it will 60' consistently in the mid-high 1.50s. If you are not trying to keep the stock look, there is no reason to keep the battery in the engine compartment. It takes up space, and I have to imagine it will live longer when subject to less heat.
I HATE power steering in any car other than my daily driver. I put manual steering in this car when we first built it 10 years ago and have never once wished it had power steering. If it has power brakes, swapping to manual will open things up as far as cam selection (don't have to worry about vacuum). I run a 42GPH Meziere pump with a 4 row copper radiator and it doesn't go over 195°F idling in traffic on a humid 95° day.