The original metal taillight panel on my gt350 was cut out to accomodate the cougar tailights. The fiber glass Shelby taillight panel is screwed on to the the areas above and below the original concave metal taillight panel. The fiberglass panel fits nicely in the space bordered by the 1/4 panel extensions, valence, and deck lid.
I'm not sure if I've answered you questions. Let me know if you need more info.
First: there is a large rectangular cut out in the original Mustang sheet metal. This was backed by a riveted on metal structure by Shelby. Second: There are two types of fiberglass panels (original ones that is) the early type butted up against the perimeter of the trunk and watch out as it leaks fumes into the trunk if its not sealed well. The second one has a lip on it that screws along the trunk opening along the top. Then you delicatly install the tail lights. You really ought to look at a real car before attempting this.