1) You will need to connect the Eros to the play head. This usually means finding the cable attached to the play head, disconnecting it from the internal repro amp, and extending/reterminating it so it can be connected to the input of the Eros. Every case is a little different and I have not done this mod to a B77. So I'm afraid I can't be any more specific.
2)Yes, it connects to a line level input on your control preamp, just like a phono preamp would.
I will also mention that the EQ settings are NAB and IEC1. NAB will work with most all 7.5ips tapes. It will also work with 3.75 ips tapes, but it's slightly off on the HF response, the HF turnover for NAB 7.5 being 50uS and the turnover for 3.75 being 90uS. What this means is the top end at 3.75 ips will sound a little bit rolled off.