Yes the hose is for the valve breather.
As for the intake, a true cold air intake is better than stock, duh, but you'll have to build it as there are no kits available.
For max performance, you would want some sort of plenum over the TB.
Don't attach an open element (cone, K&N style) directly to the MAF.
Don't just have an open element filter in the engine bay without a heat shield.
Try to use 2.75" pipe, its available and cheap, do a search, I've posted where to buy it.
Here's a pic of my intake setup, works very well.
I'm using the stock air box (also used as plenum), stock fender draw, 2.75" tubing, and K&N panel filter.
I am currenty working on adding a plenum above the TB and a piece to better redirect air flow from the fender into the airbox.