I am confused as to where to place my diacritics within the vertical metrics of a 1000 pt em square... for example, do the acute and grave accents, the circumflex, tilde, etc have to be included within the em square, or do they sit on top of the em square? If they must exist within the em square, to I have to increase the vertical space between the cap height and the ascender line to accommodate diacritics? Any direction here is much appreciated!
The metrics used by the application for laying out a line are separate. When laying out text using an OpenType font, the sTypoAscender, sTypoDescender and sTypoLineGap are recommended for the application to use for placement of lines (as defaults: applications can always override).
So, when considering how to size and position outlines within an em square, the first thing I think would be considered is how you want the size of text displayed with this font to appear in comparison to other fonts. Then, I think you'd want to place diacritics wherever you think is most appropriate; and then set the font's line metrics to be appropriate for your main, target use cases.
Some languages may stack multiple diacritics above or below base letters, but you don't need to set line metrics to allow for that if it's not a main use case you're targeting. Math fonts, such as Cambria Math, have similar issues: they can have glyphs for brackets or integral signs, etc. that are very tall, but the default line metrics are not set very tall to accommodate them; otherwise non-math text using the font would by default probably get laid out with way-too-large line-to-line distance.
Caveat: I'm not a font designer; I just have some familiarity with the font data and how it gets used in apps.
Jean François shared this image from the Imprimerie national of a two-part, display size diacritic, tightly bound together:
And Mathieu Triay provided this photograph of a vertically kerning Q: