You've pretty much got it all right. You have a KVAFM (AFM for short) not a MAF though... they are quite different types of device. The vacuum line merely needs to a vacuum reference AFTER the throttle plate. Tapping the vacuum line running to the cruise control is a popular choice, but there's no reason not to use the same vac line as the stock valve used.
Yes, recirculating is preferred. Not doing so can cause excessive richness when the valve opens and for some seriously irritating stalling and loss of power when trying to lean back in on the gas. Not everyone has a problem and I suspect it's largely due to the effectiveness of the valve to purge and do so quickly and the amount of boost, etc.
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