#1. No - do NOT install in the default directory. That will put you in the Program Files (x86) folder, which is "protected" by Windows.
#2. No - Use JSGME
#3. Yes you need LAA. The app needs to have the header's bits flipped to tell Windows it can write to more than 2 gig
Read the first page of the thread for FotRSU:
Fall of the Rising Sun Ultimate - Full Release
There are installation and activation pointers in the first post there, and after you extract the mod to the MODS folder, you can see all sorts of "Help" pdf info in the Support folder, including "ActivatingFOTRSU.pdf" and "Install Notes For the Various Versions of SH4 in Windows.pdf", along with other useful (sometimes boring) info.