The bus for the optical drives on that machine is ATA-3, which is 16MBps, which is dog slow. The hard drives are on an ATA-100 bus (100 MBps). While the hard drives are backwards compatible, I really don't think you'd want to use that pokey slow bus. (FW 400 is 400MBps in ideal conditions, just for comparison purposes, and SATA drives are anywhere from 1.5GB/s to 6GB/s - a HUGE difference)
I also wouldn't rely on something that is starting to show failure in SMART status. Even if you move it, the damage may well be done (and may in fact have nothing to do with its current position).
I'm also not sure that the cooling for the optical drives is anywhere near the same as the cooling for the hard drives. Optical drives don't tend to get hot the way HDs do, so I don't know that moving the existing drive would help and in fact might make the situation worse. Heat rises, and all that...

If it was me, I'd get an external FW drive enclosure, put a new SATA drive in it, and use that. It would be forward compatible should the G4 croak, and should be considerably more reliable than an aging PATA drive. Hard drives do fail eventually and the older they are, the more likely they are to fail.