Can DBD::Oracle be installed without instantclient?

Probably. http://www.oracle.com/technetwork/database/features/instant-client/index-100365.html says Instant Client allows you to run your applications without installing the standard Oracle client or having an ORACLE_HOME.

So if you want more bigger files to download and manage, you can do that

Is it bad practice to point to a different library location,

It depends. If you're on a machine where the sysadmin/dba/whomever likes to upgrade oracle client without updating everything else that depends on it (DBD::Oracle), its a good practice to protect yourself

Otherwise it seems like a little extra work

2. Are there other concerns installing DBD::Oracle can change/break other default settings of the Oracle database?

No