In engneering terms the best place is in the area inside the stem clamps, so that the stem resists any expansion of the steerer caused by the plug.
In practice the expansive effort is so tiny and a carbon tube so strong that this is irrelevant, though in any case your top cap bolt won't allow it to go anywhere else. Be sure to grease the metal bts of the plug lightly, you'd be surpsised at how much water gets down there.
The plug (and the bolt and cap) is only there to allow you to adjust the preload on the headset bearings, once you've tightened up the stem you could ,in theory, remove it as it isn't doing anything other than filling up the hole.
Yep, but next time you need to adjust the headset or replace the bearings you'll need the top cap to reset them. Once the stem is tight nothing can move.Is this because the stem bolts are now taking the strain?
BTW I wouldn't recommend removing the top cap etc.