Making the steering column look a little more authentic.

Is there a way to remove the locking mechanism and maybe fabricate a new mount and also mount the key lock in the dash?

http://www.flickr.com/photos/59077920@N06/5814106376/in/photostream
(change the AT to the symbol)

How far away is the steering wheel supposed to be from the dash?

sure there is, I did mine just that way. once you remove the locking mech. you cut off the house and reconstruct it as it were never there. you can put the new key anywhere you want in the dash then. the distance of the steering wheel depends on how tall you are, you can modify it to any height, I am 1.72m tall and my steering column sits just underneath the dash attached, you could even cut a piece off the dash to adapt it higher

Any way to make it look kinda like this?
http://bringatrailer.com/wp-content/uploads/2008/11/1956_Porsche_356A_Coupe_Interior_1.jpg

I couldn't see any of your pictures but I am assuming you have a later model steering column. If so, then look for a pre-67 (I think) style column.

Hide the wires using the old Pepsi bottle trick.

Mat, read down a few topics..."Show me your turn signals".

And that is why JPS installed a '66 - '67 steering column on my '71 pan based speedster.