1) Live rock does not need light at all unless you are wanting coraline growth, coraline is not what makes the LR live. The organisms that make it live are non-photosynthetic organisms.
2)Whatever you are using for flow should pump out atleast 25gph for flow. In a FOWLR tank, the higher the water flow the better, as this increases the water movement over the LR creating nutrient export, which in turn makes your bio-filter (LR) more efficient. Higher flow will also prevent dead spots which are very attractive to problematic algaes.
3)Using established water alone will not jumpstart a cycle that is worth speaking of. If I were you, I would buy 3 lbs of LS from the bottom of their tank, then I would get 3-4 lbs of cured LR from the same established tank that the sand came from. Then I would use 2.5 gallons out of the same tank. you will see no cycle from this method as it is basically an entirely established tank packed into one small area. After about a week do a half gallon water change, and you should be good as far as trace minerals.
BTW: Any size fish in this aquarium would be a certain failure at some point in the near future. Saltwater fish are very sensitive to lack of space and parameter fluctuations. I would get some sexy shrimp or some other kinds of ornamental invertebrates
