You cannot target only the `video_node_form` with an existing hook in D7, but you can target all node forms and then check against the node type to alter the form. Take a look at the documentation and comments on [hook_form_FORM_ID_alter()](http://api.drupal.org/api/drupal/modules!system!system.api.php/function/hook_form_FORM_ID_alter/7). It may also help to check out how the [Book module implemented this hook](http://api.drupal.org/api/drupal/modules%21book%21book.module/function/book_form_node_form_alter/7) in D7.

    function df_video_form_node_form_alter(&$form, &$form_state) {
      $node = $form['#node'];
      if ($node->type == 'video') {
        $form['actions']['submit']['#value'] = t('Upload');
      }
    }

With regard to your second question, you generally want to place your hooks in the `.module` file so that they are guaranteed to be picked up by Drupal. There are some cases where this is not necessarily necessary, like in [hook_views_api()](http://api.drupal.org/api/views/views.api.php/function/hook_views_api/7) where you can points to a file containing other views-specific hooks.