Get yourself a farm with about 10 or 15 sheep standing on grass and they'll be regrowing almost as quickly as you're sheering; dye them the colours you want and go for it. Wool is laughably easy to harvest now. Also, lambs come the same colour as their parents (not sure how it works if parents are different) so two bits of cactus green will make infinite green sheep.
On top sounds good; more visible if nothing else. There'll also be a large sign on top of the station, like the one in the screenshot.
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