I agree with your thoughts on the surge tank. The cap needs to be at the highest point on the system. You could probably lower the surge tank and extend the fill fitting and cap up to become the highest point in the cooling system.
The overflow tank could be located above the fill cap, but when you remove the fill cap to check the coolant level, coolant would siphon/drain from the overflow tank and create a mess unless there was a shut-off valve adjacent to the fill cap. The problem here is the old memory thing..........and we all know how that works.
John