Certified GKH Gardening Expert
The airstone should be placed on the floor of the tank. This site has illustrations of a few different setups:
The simplest answer to your second question is: You can tell if they look happy. If the plants aren't getting enough oxygen, the roots will start to smother and you'll notice a rapid decline in health.
This article will tell you more about Deep Water Culture: https://www.gardeningknowhow.com/special/containers/deep-water-culture-for-plants.htm