Am I understanding correctly, you wish to hook the magnum direct in line with the skimmer? If this is your intent I can only warn that if you keep the fine particle removal media padding in there, it is likely to back up much faster with the skimmer attached to it. You may find you have variances in water flow, which will effect the effectiveness of both filter and skimmer, and you could end up with overflow of the skimmer.
As for the bioballs vs live rock... personally I prefer the live rock. You are more likely to find more surface area in live rock than you will achieve with bioballs, but that will depend on the density of the rock. White tufa rock, base rock, live rock... be selective in your pieces and find the ones that weigh less than you'd think compared to size. The more porous the live rock the more surface area you will get.
If you go with live rock I would eliminate substrate if you are doing it in a specific compartment, or clear/lower the sand level near the out take tube to avoid the water coming back into the tank from blowing around. It makes a mess and if it settles on the rock it will break down into silt, which can be a pain in the butt to remove and contribute to cyano bacteria blooms in those locations if not removed. You will eventually get silt as the rock itself breaks down over time, but loose sand breaks down faster because each particle is smaller, thus the buildup happens faster.
Hope that helps.