After the canister it goes to the air cleaner, there is a small tube right net to the crankcase breather tube. You can indeed ditch the charcoal canister if you do not have to worry about smog, you could then just run a vent from the reservoir to outside the car. I am not sure, someone else will probably chime in, but I think you can abandon the blue tube and just go from the reservoir down through the floor of the trunk to under the car.
Good Luck
Justin