Coolant flows FROM the intake manifold fitting through the 5/8" inch hose to the lower heater core nipple; and then BACK to the water pump throght the 3/4 " hose from the upper heater core nipple. A valve in the 5/8 inch hose will not depressurize the heater core. It WILL stop the coolant flow.
The "item" you refer to is a vacuum operated shut off valve. Normally OEM installed on 1977 air cond. cars. The vacuum valve should not affect placement of any cutoff valve that you install. (The factory vac. valve is used to cut off coolant flow to heater core when AC is on.)
Check out Bob Chadwicks 1977 corvette home page for a wealth of information on this subject--and others! Bob's www. page has photos of his installed cut off valve and the OEM factory vac. valve.