Thrusters work in all 3 Axis (x, y, z), Directional thruster only work in one of these 3 axis.
You can cover every block (even engine blocks), it will still work. I recommand using at least some gyrophalanx or thruster blocks inside your ship, making it harder to kill these block wich would make you disabled to move or rotate your ship.
I usely build a strong armor hull around my ship, and put all other blocks inside.