I would suspect if you put the fuel tank all the way back to the CG that you would have fuel pull issues without a pump. You could safely go back 2-3 inches from stock with out a draw problem.

No the 125 isn't too much engine. But it can be if you use too much throttle. Keep is slow and it will be safe.

I use a 16x6 APC or 17x4W APC with my Saito. Either would work very good on your UCD I would think.

I would stay with the inverted mount on the UCD. The engine runs fine inverted and installation will be much easier. Sometimes you can get a bit of flooding but it's not too bad. I run the engine inverted in all my UCDs.

Thanks
Barry