About host in IIS, you should be care of not to create a self-host project (Library) which not contains .svc file. Of course, you can add it manually, too.
So, just to create a WCF service project, after that, copy the .svc files, .cs files and config file to a IIS managed folder which you can create it as you create a virtual website.
Web adding reference from a WCF service project, not to use web service finding, just using service finding.