Yes, I believe you would make those changes in indexes.conf. If you want to apply settings to all of your indexes, then you can put those settings in the default stanza. If you need to alter any of those default settings, you can put them in the stanza for the individual index - these settings will win over the default settings.
But like esix mentions, where you put your indexes.conf file(s) is really up to you. Yes, it needs to be on your indexers. And yes, how you get it there depends on whether you have an indexer cluster or just standalone indexers.
But generally speaking, for any conf files, it's important to understand the order of precedence. You can have the same conf file in multiple places with conflicting settings - but if you know the precedence, you should be good.
So yes, you can put the setting etc/system/local. Or you can create your own app like esix mentioned and put your indexes.conf in there. We, for example, have one app where all of our indexes are defined.
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