OK, I will take a stab at answering all the questions
Location on axis:
IF you are using a seperate switch, it can be anywhere on the axis as your have to give it position information when you set it up. In my case, I use combination home/limits. Therefore, they are located at the extreme end of the travel. In some cases, this is at the "0" end and in others, it is at "max travel". Your choice.
ACCURACY: As with all things, this will depend on the type of switch and the care used in setting it up.
PROXIMITY SWITCH ACCURACY: I am not sure on this one, as I have never used one. This would take some research on the data sheets, and would most likely depend on the switch used. As to other types, there are the common micro switch (in various kinds of cases or not) and optical switches. For maximum repeatability I prefer the optical units.
SETUP: Yes, the homing routine should be run at each power on. Even though most programs will remember last location, often there is a slight movement of an axis when you power down or up. Exact location cannot be guaranteed on power up. I think this is a good habit to get into. Home as a routine part of setting up for a job.
Art
AKA Country Bubba (Older Than Dirt)