No the valve cover wont really work. The VE is like the 2000+ Roller rocker motors here in the united states, and if you would look at those, they are taller and are missing some things than the older SR20DE's.

You could use a valve cover from a 2000+ SR20, that would work.

Making it RWD? why, why would you bother with that. Stupid question, keep the SE-R FWD, or go buy a S Chassis car.

Is it just as strong? yes its very strong. The compression is very high so it doesnt do well with turbo unless you plan on building one to have lower compression. The VE responds very well to nitrous though. My friend in miami is building a SR20VET, but its not as easy as it sounds.