Sounds like he's trying to rid his property of the galvanized iron, which is a good thing.
Yes, you can extend the auto-fill line to the meter, and tee off that to the house, as long as the line you're replacing isn't larger than 1". Just replace like-size with like-size. Technically, you're not really extending the auto-fill line as much as you're replacing your main. Which way the tee faces is just your way of looking at it. According to George Costanza: "It's all pipes, what's the difference!"
Read up on backflow prevention. But it doesn't matter if you go through with this plan or not, you need a proper BFP between your pool and the water supply. BFP protection is a good thing for the whole property, not just the pool, and will very likely be required someday for residential buildings as it is now for most commercial buildings (in CA, anyway). It'll be a while before they try to get us all to retrofit, they'll start out with mandating it for new construction. So install the BFP device before everything, so that it isolates both your pool and your house from the water main.
I would use schedule 80 for a water main, especially the slip-to-male-thread adaptor that will connect your new main to the meter. That is a major stress point, and I just had one snap (cost me $400 of water before I could fix it). It was the city water guys that recommended the Sch 80 adaptor. They said they see that failure a lot. You might have to find a good plumbing supply place for that part.