This is a lot of fun! IPD has silicone hoses, BTW, for around $52.
Check this site, good write up with pics:
http://www.volvohowto.com/volvo-850-s70-v70-c70-how-to-replace-heater-core-hoses-do88/
You will find top hose Vs bottom hose question answered. Plus be very careful with the firewall connector, the plastic tends to fall apart if stressed.
No EGR on this car. The purple line is for the air injection system, which probably doesn't work anymore anyway. There is an easy SAS delete.
But get your heater fixed soooooon, it is getting colder each day.
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Keeping it running is better than buying new
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