The splitter can be mounted were it's convenient. At the antenna or on the third floor, with 'drops' heading down to the lower floors... What's convenient in you lay out?
The Ideal brand
http://www.homedepot.com/Electrical-...&storeId=10051 splitter looks like the best option for you. Connect you long run of cable to the 4 dB loss port.
I prefer the HD7000 or it's big brother and sister the HD7010 or 7015. The HD7694P is a great antenna but it lacks support of real CH-2 through 6.
Depending on the obstructions looking toward WLIW, you may need a large UHF only antenna dedicated to that signal... that would call for a second HDHR.