This would definitely kill any yuckies, but would melt anything other than a thick steel or iron cage. A disinfectant used in aviaries would probably be great. But a bright area close to the hubbub of your household is ideal. There should be no drafts of hot or cold air. The kitchen, due to fumes, flames, and such is a poor idea.
Dreary basements are a poor choice too.
A finished basement is fine, as long as it's not damp and has good circulation and there's action going on that the bird can be part of. A. Depends on the bird. Birds, like people, need undisturbed sleep. If the bird is in a room you can darken, then no, you don't need a cover. Sometimes, the bird may be scared of the covered cage.