You MUST leave the heater selected to hot in order for the coolant to flow. I'd say most, like myself, plumb them so they
heat the coolant from the Webasto into the main cabin heater first, then it returns to the engine, heats the engine coolant
and is reheated again back just prior to entering the cabin. You could plumb it to heat the motor first but getting the fresh warm
effect in the cabin is more desirable. If you left the main fan on, even on low, you'd kill your battery pretty quick I expect.
Maybe there are some who have the fan on the timer switch but I'm way too paranoid for that.
You'll have to decide for yourself. There is one really good thread on installing into an 80 in that forum and lots of people
have chimed into that one.
My webasto is installed directly against the firewall by the heater but down low. I run the exhaust behind the shield and
it exits behind the front tire on the RH side. I have my inlet air line extending down along the transmission tunnel so the
air is drawn uphill. I've been in some/many water crossings without incident.
Here are some pics, my 60 has a 12HT so not sure how your heater lines work.
I just ran a T from the fuel line by the motor. One thing to remember is keep the fuel pump level, and be really careful to follow
installation instructions concerning the fuel line.