Yes, a ring foresight is the norm for target shooting. You're allowed to use a post foresight, but very few shooters do.
Yes the foresight ring will surround the whole target. It's recommended that the ring is quite a bit larger, large enough that the target doesn't touch the inside of the aperture as you aim; for NSRA targets that's around 4.0mm+.
Focus on the foresight ring not the target; the foresight moves, the target does not. The target will appear a little blurred in the background, but this is OK.