I use Sponsored or Sponsored Links but as onLoad said, lately I have been positioning ads outside of categorized sections to make them more part of the content than a different section of the page, and it helps ctr a lot.
you cannot bring undue attention or confuse the visitors with your ad placement. if you position the ad right and can blend the ad with your site layout, thats all you need. don;t risk yourself getting your account banned and think long term
At first place what is the use of it, neither it increases your clicks nor it gives any value to your visitors
No, it's not allowed. Reade the AdSense TOS and you will understand what's allowed. Don't expose at risk your publisher account for something like this.