850 gph is fine we don't usually count external mechanical filtration flow rates as they don't really circulate the entire volume of water in the tank thru out.
You do realize that macro rock is dry and sterile - no bacteria so do 50 lbs and get 15-25 lbs more of LR to seed the bacteria least your lookin at a real lengthy cycle that eels might not be able to handle. It takes a year or more for denitrifying bacteria to mature with LR let alone without. Also 1lb rock per gal is a guideline not law, 0 ammonia 0 nitrite 20ppm nitrate is a better law - stock low and your rock demand lessons eels only require food once to twice a week which lowers bio demand
Live sand isn't really alive it lacks oxygen that aerobic bacteria needs so it's basically a bag of ammonia that jump starts the cycle once it's subjected to oxygenated water - the cycle won't be as extreme as it is with your rocks but enuff that it might not be wise with eel's. Smaller damsel type fish are more suited for the initial cycling
This is a good idea. Get the 50lb bag of roxk, then about 25lbs cured LR from your lfs. If morays are your main stock, you probably wont need all 50lb of the dry stuff, really its up to you on how many rocks you want in the tank. Dont add the moray until after the cycle is complete. Damsels like mentioned above are good (and cheap) to help kick start the cycle process. They will definitely disappear once you add the moray, so dont pick out any you plan on "trying to keep".
