After a test ride, here are my obervations. The bag stays put and only touches the headlight about one square inch... there's a rubber hand grip that tucks under the bag between the the top of the headlamp as well. Visibility is good all around except for about 2 feet right in front of the bike... if something comes that close from the side, you'll see it, as far as obstructing the forward view, I don't think it's a problem.
This bag is for traveling, not a permanent fixture... hopefully it won't scratch the top of he light but if it does after my trip to the left coast, I'll let you know.
It may very well fit below the light but then you may have an issue with it resting on the fender.. haven't tried that or in the "dead space" because I like it where it is.
I plan on buying the large "Bikers Friend" roll bag for the back.....