1. I don't know of any difference between external and internal if both work for you - it is your choice.

2. If you install your BIAB to your internal drive in the same directory/folder as the old one it will overwrite any files that it needs to, so all of your RT's will be current as of the date the usb drive was populated. If you delete the old version BIAB on your internal drive you might delete some things you don't want to go, like custom styles and songs.

3. I can't help with naming of the RT files, I just installed them all. With the new stretching feature freeing up so much space it isn't much of an issue to have them all on a drive if you have the space for it - 500gb is a good size I would imagine you have the space for a full install.

The only limitation I see on your system specs is the 1.3ghz - might be a little slow for the new stretching routine and RTs in general. Give it a try - if it is working okay with the external you should be okay internally as well.

Good luck.