Directly on the bottom of the case itself.
Yes, but the only drive that is known to be an ATAPI (EIDE) connecting drive that supports Blu-ray is the Panasonic UJ-215-B. They were astronomically priced new in 2007-2008 when they were released. Good luck finding one today, and if you do it will still be very expensive and almost never a new one. But it seems to be a direct drop in replacement. I myself have already begun this project, and have one on the way right now. Bought it for $250 so it was pricey but considering it was new I got very lucky.