I have never used a heater in my rods but I suspect I agree with your thinking that it doesn't matter whether you block the flow going in or coming out.... but I have a saying, whenever there are two ways of doing something, one is better than the other.... so I would put it in the pump line to eliminate unnecessary pressure in the heater when no heat is needed.
On my '40 flathead, the shutoff valve is on the head, i.e., the inlet side of the heater. This prevents hot water from entering the heater (and the car) during the summer months. If placed on the outlet side of the heater, the valve will prevent hot water from flowing through the heater, but the engine will still warm the water already in the heater, and some heat will transfer into the passenger compartment.
I thought it was on the intake supply (warmer water) and return to the water pump (pulling cooler water from the rad). Pressure is the same throughout the system.
An enclosed system with a pressure cap?? If you have anything to add or rebutt other than 'seriously' I will be glad to hear it. I don't claim to be an expert and am willing to learn every day.
I agree...the pump is only circulating the coolant that is being pressurized by heat expansion in an enclosed system. Start it cold with the cap off and let it run. There is no pressure...but it still circulates. The pressure in the system is like the pressure in a bike inner tube. Grab it anywhere and pinch it off with your fist. The pressure will still be equal on either side of your fist. Same thing with the heat valve.
Hackerbilt, now that's a really good explanation. I'm no expert but it makes perfect sense to me. Regards, Phil