In answer to your questions:
1. If I were doing it I would use the
LR & at least 3 - 4 inches of sand. I would also start off not using the bioballs & would put
LR rubble in the wet/dry. Also keep the bioload from the fish low.
2. There is no reason why you couldn't use this rock provided you have some regular
LR in the tank as well to help colonize it. The "dead" rock will become live rock in about 60 - 90 days depending on how much live rock you have with it.
3. By not having the proper spectrum of light you will be opening yourself up to problems.