What kind of cichlids are you considering? They're a diverse group of fish so their care is impossible to describe with any brevity. African Rift Lake cichlids do well when kept in crowded conditions. Dwarf cichlids are not usually kept this way, instead they are usually kept in densely planted tanks. Medium to large New World cichlids (convicts, Jack Dempseys, green terrors, oscars, etc) are usually kept alone or with plenty of room for the fish to avoid one another.
So, before I can comment on your proposed ideas, you'll have to specify exactly what kind of fish you're interested in.