Yes, it quiets things down a little... but that's not the entire (or arguably the primary) reason for it... I've posted exhaustively on this in the past, research it a bit... then put it back on.
To put it simply: It quiets things down by reducing turbulence. Put it on at about the same distance from the throttle body as it is in the stock location.
I hope that air filter isn't in the engine bay... (or a K&N filter...
especially on an off-road vehicle)
Barring significant machine work you're not going to get much more out of the 7M-GE than Toyota already managed to squeeze out of it in the Supra version. Even with it you won't see amazing results, I know people who've bored the engine to its limit, put in stroker kits and custom cams, over sized valves and still don't even see 300RWHP. The 7M is just a poor 'all-motor' platform. I wouldn't really go beyond a port and polish, properly tuned intake and exhaust for your build, as cool (ceramic coated intake plumbing and inlet OUTSIDE of the engine bay) and smooth of an intake charge as possible. Don't run higher octane fuel than you need. Run the right temp range spark plugs (hotter plugs are NOT just magically better). Stop me if you already know all of this... :P Adding a thermostatically controlled oil cooler is a VERY good idea. If you're willing to sacrifice your highway mileage (
) a shorter end-gear would help a lot. Cams are a biggie naturally but keep an eye on the profile as the off-the-shelf aftermarkets are generally designed with the GTE in mind.
There are no excellent exhausts for the GE out there. You may try the Pacesetter or OBX, they'll both benefit from better scavenging as long as the rest of your exhaust is properly tuned for it (see: the right size piping for the job).