We ended up removing the whole heater assembly and the console to the left of the driver. The console is attached at a few points to the floor. You may want to temporarily remove it anyway to get the old floor up and new floor down. We also removed the front heater as well. This gives us maximum space for our final console design with as much leg room for the passenger as possible.
If you go the heater removal route, you should retain your heater cores as they may be needed in the future. When you remove the heaters, you loose the defrost/heat that blows on the windshield. So far, we've not needed defrost. [Keeping my fingers crossed.]
We do have an electric heater. We also do not plan on spending any time in severe cold. To us, severe cold is defined as below 40 degrees!
As for the hole, yes. That is to accomodate a manual transmission which needs that area for the shifter to pass through the floor. On our bus, there was a piece sheet metal covering the hole under the plywood. I welded up the hole using that piece of sheet metal.