well yes the turbo is in the small end for a performance/racing application. but if you stay in the conservative end of the boost range arround 7-8 psi, i think you will be happy having chosen a turbo in the smaller range. it will be very quick to spool up and if your waste gate is big enough, you propably wont roast the turbine. the powerstroke diesel is arround .90-1.00 A/R in the turbine housing if i remenber correctly.
with regards to the exhaust, id try and see if you couldnt use the cast iron headders turned back to front and plumb the turbo from there, it should fit where the battery sits now, and with the low boost, intercooling isnt imperative, a good water inlection system can be made for very few money and should keep you out of detonation.
it doesnt have to be rocket science