I've used a few of these chuff generators in upgrades, here's a typical mounting for a Lionel steamer with a Pittman motor. In this case, I take a piece of fiberglass and using my Dremel I shape one side to match the motor contour. This is glued on the motor in the proper position, then the chuff generator is positioned and glued onto that mounting base. Before gluing, I insert (but don't solder) the IR sensor. After the board is bonded and secure, I use a 1mm shim to space the sensor from the flywheel and solder it in place. The flywheel tape is just one I print out onto shipping label stock. The beauty of the tach tape is the stripe count is not critical, as you're going to calibrate the rotation anyway. Note that the calibration connections are blank at J1, I'll just clip a lead to those to calibrate, then remove it for running.
For smaller Mabuchi motors, I typically have to have the sensor soldered directly to the board with no spacing and add a spacer or two under the PCB to allow clearance from the flywheel. To that end, I'm laying in a supply of thinner fiberglass to make narrower shims for precise spacing.
Since this install was not a Super-Chuffer, I needed a source of 5V power. For TMCC upgrades, I typically tap into the R2LC in that case for the little bit of 5V I need. However, this locomotive has the wireless tether already using that supply, and I'm reluctant to risk overloading it. That being the case, I just make a little module with a diode, cap, and 5V regulator, encase it in heatshrink, and run it off track power.
Hope this gives you some idea of how this board would be used.