In regards to your first question, yes this is possible - I have my system set up this way. For VSTs requiring more than 100 GB storage space, I keep the actual soundbank files on an external SSD, and just have the player installed on the internal drive.
When going through the initial installation process, it usually asked you which location you want to use to store the sound files. You just need to choose the external SSD drive and once installed, the player should know to pull them from that location whenever you load up the instrument. As long as the external drive is attached via an up-to-date connection (at least USB 3), it should load pretty fast.
At least, this is how it works on my Mac - I don't know if the installation process is different in Windows. I'm also not familiar w/ the the HD formatting requirements for Windows, so can't help you with that part of it.
But in theory, there's no reason why you shouldn't be able to set it up this way.