Brian
In most cases you are better off with the hitch as close to the towing vehicle as possible. It also depends on how the weight is distributed on the trailer.
Andre
If the rear has the proper level of gear lube, the rear should be okay. I would recommend disconnecting the drive shaft. Not sure on the 59, but the earlier tranny had problems with lubrication without the forward shaft rotating.
I'm not big on pulling pickups on dollies. Usually the dolly isn't up to the task. You will need brakes on the dolly. If you're going over the mountains, I would highly recommend a full trailer. They're a lot easier to control.
