1) do you already have the live sand an live rock? If not, i suggest just purchasing dry "dead" sand. The dead sand will become live over time, and it will cost a lot less $$$. I suggest adding the Largest pieces of LR first (the ones that will sit on the bottom), so they touch the glass bottom of the tank. This way, if you happen to get a fish that burrows in the sand, your rock is stable and won't topple over. The i would put in the sand, and then the water (make sure you don't leave the LR out of water for too long, or you'll kill most of it...) you also really need to make sure your tank is level. If it's not, it could buckle under pressure... that wouldn't be good... it's not likely, but it's possible.
2) after you setup the tank, you need to add some powerheads (these are basically just pumps that sit inside the tank to move the water around. I'd add 4 powerheads. 2 on each side of the tank, pointing at the opposite side. Have one on the top, and one near the bottom. This way, your water doesn't become stagnant and yucky. Depending on what kind of filter you get, you may want to run it during the cycle, and you may not. You don't want to run the skimmer during the cycle, though, as it will remove the ammonia in your tank. You want the ammonia to rise during the cycle so the bacteria will grow.
another thing i try to tell everyone is that you should do water changes during the cycle to keep the ammonia level at or below 0.5ppm. If it gets over that, it will begin killing off all of the live things on your LR (such as hitchikers and good algae), and the cycle will take even longer. And then you'll have wasted your money on LR, because you killed it. lol.
another thing, do not ever use tap water for your tank. That is the #1 cause of algae problems in this hobby. You should purchase reverse osmosis water (RO water).
3) yes ma'am... you're so smart! lol! salt doesn't evaporate, so you just top off with fresh water.
4) yes, there are... of course everyone thinks the fish they have are the best, but i love all of my fish. Now, it depends on what kind of tank you want. With a 120 gallon tank, you have a lot more choices than i do (i have a 55). Do you want an aggressive tank (in this kind of tank, you have to have all aggressive fish, and most likely will not be able to have inverts), or do you want a peaceful tank? I have a peaceful tank, and here's a list of my inhabitants:
Clownfish (everyone in this hobby should have a clownfish IMO). Now there are many types of clownfish, but i have the "finding nemo" type... it's an oscellaris clownfish
2 Lawnmower blennies
yellow watchman goby
engineer goby / convict blenny (this is neither a blenny or goby, but a species of it's own...)
black & white heniochus
lubbock's fairy wrasse.
Here's pictures of each of them (in order of what i listed). To clarify, all of these pictures are mine, except for the one of the engineer goby. I used that from someone else's thread... hope they don't mind, but i don't have a pic of mine...