I recently had a skirt installed. 1) Yes it will melt within days, even hours of you driving it. 2) I had a hole cut irregardless of how the muffler sits (it also sits back like yours) and even to this day it is fine. No melting, not even a hint of heat on the skirt. The hole in itself is not that big on mine (the guys at J Racing did an awesome job, they have good attention to detail), so in saying that, you may be able to cut a bigger hole or leave it as is if you go for the CES. 3) I would be cutting a hole asap or getting the dumpy tip put on. The exhaust gases will build up behind the skirt and cause condensation, which in turn will ruin the double sided taping on the right hand side (the skirt will come off at the rear bar molding).