The claim is that any group is isomorphic to a subgroup of $S_{n}$. Now you want to prove the claim but the problem is that what $"n"$, you want to choose. Now the injection or should I call embedding of $G$ into $S_{G}$ is what is popularly known as the "Cayley's theorem" , in most books is proved as you have written down. But a more conceptual way to look at this embedding is via group action.
We all know that what group action is right. It's G acting on some set say $X$ that is a map from $G\times X\to X$, satisfying some axioms.
What is a alternative way to look at a group action. You can easily derive from the previous know definition of G action on a set $X$, along with the axioms that it is nothing but a group homomorphism say
$$\phi:G\to S_{X}$$
where $S_{X}$ is the set of all bijections on X with composition as the binary operation. $S_{X}$ is basically a group. When $X$ is finite of size $n$, it is the popularly known Symmetric group $S_{n}$.
Now using this visualisation of group action, We can see the following group action G action on G itself by "left-multiplication" i.e
$$. :G\times G\to G $$ $$(a,g)\mapsto a.g$$
This is essentially a group action. And if you visualize this action via the other way you get a map $\phi:G\to S_{G}$, and that map is exactly the map you have written. This map eventually turns out to be injective and hence the result.
But the question about whether that $"n"$ can be made smaller than $|G|$, is tough question in general to ask! I don't know what's the answer to it. But in some cases $n$ cannot be made smaller. For example in case of $Q_{8}$, it is good exercise to prove that $Q_{8}$ cannot be embedded inside $S_{n}$ for $n\leq 7$.