If you want a airplane engine, sell the .37 on RCU or Ebay and get a OS .46 for $110. It's cheaper and makes more power. This is the drive washer you need and by the time you put this on the shaft and a nut and washer you might be hard pressed to find a prop thin enough to fit.
http://www3.towerhobbies.com/cgi-bin...?&I=LXCL37&P=Z
As for it mounting, yes you can put it in a .40 size plane.