Is the CCII connected to the router? It needs to be connected for the chooser to get and keep the connection. Also, there should be a "Network" control panel (If not in System 7.5.…
You definitely can.
The shop where I bought my HD from has a stack of 68-pin and 80-pin 9.1 GB SCSI hard drives for $5 each and I bet you can find them for that much somewhere …