Co-Locating Patch Manager Server and WSUS 6 on a Single Windows 2012 R2 Server

We are planning an implementation of Patch Manager.  Our current environment of WSUS 3.2 is running on Server 2008 R2, but we are planning to install new Server 2012 R2 systems for WSUS.

After a lengthy conversation with SolarWinds Technical Support yesterday, I have a few remaining questions.  After speaking to the rep and explaining that we only have about 300 clients in each site that each patch manager server will responsible for, he stated that it should be perfectly fine to install the patch manager roles on the same servers that WSUS will be running on.

So, my questions are these:

1. Would it, in fact, be acceptable (performance wise) to install Patch Manager roles (all three) on the same 2012 R2 servers we are running WSUS from if there are at maximum 300 clients that will connect to each?
2. When installing WSUS, it wants to install the database into a Windows Internal Database.  Can Patch Manager be installed to a Windows Internal Database, or should I do one of the following:
   1. Install SQL Express (2008 or 2012 - whichever is supported) and install Patch Manager's database into that and leave WSUS running on Windows Internal Database.
   2. Install SQL Express (2008 or 2012 - whichever is supported) and install both the WSUS and Patch Manager databases into that.