I'm not sure I follow that line of thought. Helicopter engines are pretty low powered giving fairly small engines compared to the size of the aircraft. Space isn't a big factor for hanging things on the outside.
It wasn't a 'space available comment'.
You should prefer to place the engine and transmission as close to the Cg as possible, particulalry for the 'non aerodynamic condition known a 'auto rotation'.. second factor is the engine to shaft to transmission relationship - short driveshaft usually far better than long drive shaft for transmitting torque more efficiently from the engine to the transmission.
Engine design is a complicated issue, one of the things raised here is the lower sfc offered by axial types. That only comes with higher pressure ratios, and then you need to increase temperature as well. IR signature is a major driver in recent designs. Helicopter engines are operating at much lower temperatures than contemporary turbofans. You could change the materials and cooling arrangements to bring about a couple of hundred hp extra (even quite a bit more than that in some cases) but IR signature balloons (radiation proportional to T^4).
Current operations in Iraq and Afghanistan require you to put a lot of sand and dust through your engine every time you touch down. Axials don't tend to like that very much and it's driving a lot of future requirements - as well as the power drop for hot/high operations.
Probably useful to point out that axials are more finnicky to manufacture as well. The UK was still having problems in the early 1950s manufacturing enough quality blades to limit axial production. The German wartime press/fold method leads to rather dodgy quality blades.