I had 2 closed loops like that for years. I had both pulling up and over and both pumps were hidden in the stand. One returned to a spray bar (I don't remember the model pump..it's sitting in the garage right now if you really want to know I can look..I think it was a little giant or quite one) and the other returned to a 3/4" Sea Swirl.
The sea swirl loop was originally run by a dolphin pump that was supposed to be external or internal. It ran too hot external and seized WAY too many times. Dolphin support was great, but I had to take it apart so much that I broke the one seal and now I can only use it submerged. I replaced it with on of the last T3s (or T4..I forget) before they went belly-up. Dead silent, awesome closed loop.
The first one..in which the pump name eludes me..was an external only pump with a fan.
And I'm sorry Carl but I have to disagree with you buddy.
Since pumps always work faster than gravity technically ALL pumps both pull AND push (more on that later). The "over the edge" thing is a non-issue once the pump is running since gravity would continue to pull water over the edge with or without the pump just like a siphon. I had a ball like your setup and also some unions so I could stop the closed loop, remove the pump and never break the siphon...so I didn't have to re-prime.
Now I will admit that these pumps must be primed so you can kind of say that they don't "pull" in that respect. ..They can't pull air....but they can't really push it either so I still have to stay that all pumps "push and pull"
As for the bubbles..It probably has to do with your prime pipe since that will have air in it! I assume that it is somewhat sealed...so as your pump operates that prime area gets pressurized (negatively) from the water flow.
I never understood "cavatation" in a closed loop but I have heard people say that a bend right before the intake can cause problems...I had a good 6 inches of straight pipe going into my pumps so I wouldn't know.
But my guess is…..that little piece of prime pipe that you use at the top is going to always have air in it that can get pulled into the pump at any time. It should level off after a while once the negative pressure in the pipe gets up there unless that seal is a little loose then air will constantly get sucked in..not a lot..just enough to p*ss you off.
When I set mine up I had no way to prime it...on purpose. What I did was get it all setup and remove one union. Then I sucked the air out of part of the pipe and quickly locked off the T…then reconnect the union and open them all up. The whole pipe will fill and the only air left inside would be the 3 inches of return over the lip and a little bit stuck in the pump. And that gets blown out almost instantly when you turn the pump on and let 'er rip. It blows air for a few seconds but then after that it's a totally sealed totally wet (no air) loop. Then...I used the ball and unions to keep it wet even when I did maintenance to the pump!
The only reason I don't use them anymore is because I just took my system down when I moved...since I have a new one to build I didn't feel like moving then re-doing so the closed loops are now retired.
-Fizz