barrooze -- Since 5/8 NPT doesn't exist, I'm assuming this is just a typo. But the chugger center inlet is 3/4" MPT, so the female reducer needs to be 3/4" to 1/2".
As for the elbow barb, it's not ideal, but if it's more convenient on your setup than a 5/8" barb, go for it -- it won't make or break your setup.
I figure this is no worse than the thousands of people out there who are happy with inline pump heads. I try to reduce restrictions on the inlet side as much as possible, but I force myself not to get worked up about it. The optimal thing would be to go straight into a 3/4" ID hose and use 3/4" full port ball valves on the kettles, but that's complete overkill.
What I do is somewhat similar to your picture. I have a March 809HS with an 815 impeller and a chugger SS center inlet head. I use a 3/4" tee on the inlet so I can put a thermometer in line with the pump - the wort makes a 90 degree turn in the tee then reduces to 1/2". With this setup I'm able to prime the pump without problems, am happy with the flow rate, and haven't had any cavitation problems.