The drain hole line runs horizontally to the gear pump, so that should always be full of oil. After the pump, the pressurized oil flows up to the upside down filter, then to visual flow indicator, then back to the transmission fill hole. So, no the filter housing isn't lower than the return line. It stays filled with oil (as it is upside down), the line out from the filter will drain back, as will the visual flow indicator. I had to refill the transmission, after I turned on the pump, filled the filter and lines. Probably holds an extra quart now... but the oil in the transmission is at the original height.
I plan on tapping into the wire that runs the intercooler pump, and adding a new relay. Grab some 12V+ from the starter, run it thru a fuse, then the new relay, then off to the transmission oil pump. The intercooler pump has a 10 second delay from when the engine starts before both the electric pumps start up.