Basically, yes, you want the vane more or less centered in the sensor's gap. It should have about a matchbook cover's thickness of air between the vane and the main body of the sensor. The end of the sensor is sort of C-shaped, and that is where the vane has to go. Needless to say, don't turn the car over with the starter until you are sure that the vane will clear the sensor! Otherwise you will have to buy a new sensor.
Installing it isn't very hard. You can probably do it with a 7/32" deep well socket on a 1/4" extension, with a 1/4" ratchet. The angle is a little funny, but it should fit well enough to install or remove the screws. That is how I changed the one on my 1990. Make sure the wires are routed so they will not contact any belts during operation. Then just plug it in and go.