This option is very useful to app stores: on mobile apps the policy displays both the simplified version (on top) and the extended version (at the bottom).
Once you’re in, you must select “Use a direct link” as shown below (and add it in the appropriate place):
That depends entirely on you. But the rule of thumb is your site’s footer. It’s a good way for it to be seen from every page which will ensure you’re compliant with privacy requirements.