That's not a relocation kit, that's the way it came from the factory. My 98, no long gone, developed a leak in one of the lines. I replaced the hose set and never had an issue again. Can't remember the cost, but don't think it was all that bad. Unfortunately, the lines aren't regular hydraulic type lines, so your stuck with the dealer.
As for converting to the filter on the block arrangement, I'm sure you can, but I found the set up you have is easier for filter changes, my 03 F150 has it on the block and dumps the oil onto this cheesy plastic cover on the front diff, that routes the oil over and into my drain pan. Gives another thing you've got to clean up during your oil change.