Sorry I missed yesterday.
Yes, keep the LM350 for now if it comes with the kit. There really is no need to go to the LM338. That's just off the top of my head without looking at the specs.
The current ratings for the fan are at 24V running full speed. Running the fan at something less will pull less current also. The 1.55A is if you stop the fan from turning.
About protecting the connections with line voltage on them. I would use some heat shrink (prefered) or electrical tape (eeewww) on the connections so there is no posibility they could short to anything.
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