Yes both the catalog and the original files need to be on the drive.
The catalog should go on your fastest drive.
The photos themselves can go anywhere, the location of your photos makes only a trivial difference in the performance of Lightroom, so small you probably won't even notice.
If you really want to speed up your workflow, get a faster CPU.
I keep the application and catalog on the internal SSD on my MBP. All images are stored in folders on the thunderbolt connected external drive.
Importing is considerably faster when copying to the thunderbold drive as is saving files back into Lightroom after external editing in Photoshop.
My plan is to keep the application on the MBP, but it doesn't have an SSD, just a to spec hard drive for the 2011 model. I plan to use the drive as sudo ram in a similar way to what your are doing, but the catalogue files become slow if I keep them on my internal.
Thanks, I wanted to know what was causing the slow develop of the images and now I know that both need to be on the Thunderbolt 2 drive. I am trialling a new product called the Thunder Rocket and wanted to know how to get the most out of it. Its the world's fastest portable storage! www.thunderrocket.bynifty.com
Slow develop has nothing to do with the speed of the drive. Slow develop is almost always driven by the CPU (and starting in LR 6/LR CC, the GPU might also be a factor).
Ian Lyons did a detailed study of drive speed effect, and found it was trivial. Will an SSD Improve Adobe Lightroom Performance? | Computer Darkroom
That model mac book Pro can probably take a replacement hard drive. I would consider plopping an SSD in there to get a major overall speed boost. There is no way a thunderbolt drive is going to be faster than an internal SSD especially if your computer doesn't support thunderbolt 2 (which the 2011 MBP doesn't!). Places like macsales.com sell good SSDs and have nice help videos to show you how it is done. However as dj correctly notes, a faster drive doesn't necessarily lead to better develop performance. It can if you have too little internal memory leading to a lot of swapping to the hard disk. Then adding a SSD drive will speed up your entire system, not just Lightroom. I've upgraded quite a few of these for friends and you get rather surprisingly large speed boosts in the overall performance of the machines. However, the cheapest thing to do to speed up an old Mac Book Pro is to max out its memory. That MBP model should go to 16GB which is probably the minimum I would recommend nowadays for Lightroom work with raw files from current generation >20MP cameras and the RAM modules can be had for about $100. The same place I noted above is where I would go, but there are many other places to get memory and hard disks from.