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Pretty much anything goes in terms of placement. Personally, I would have both the patch and the name tag a little higher.
As for the material patches were made from, it varies depending on theatre but again you will see examples of both cloth and leather regardless of what is more prevalent. US made patches are typically, cloth or chenille, but you also see impressed leather and decal on leather examples.
UK made patches were usually cloth with the occasional bullion embellishment (can think of a few of 8th AAF bomb squadrons that went down that route). 9th AAF, British or US sourced cloth initially but once they move onto the continent, field-painted leather becomes more common.
MTO, changes again depending on the theatre but Italian made carved leather is very common in the second half of the campaign. However they are also lots of embroidered Italian examples.
CBI depends on which side of the Himalayas you are. On the Indian side, multi-piece leather while on the Chinese side embroidered silk is more common.
Elsewhere in the Pacific, units either based in or routing through Australia took advantage of the very nice embroidered wool felt patches produced in that country.