Can I put the Toolkit on the same machine as the client, Acrobat/Reader?
No. The toolkit must be installed and run on a separate machine. The toolkit must be installed on a server. Acrobat and Reader are not allowed to be installed on a server.
Note all the documentation for the FDF toolkit is in Adobe Acrobat PDF files. So how in the world are you supposed to use a toolkit when all the documentation is in an PDF file on a computer in which you cannot install Acrobat Reader?