oby,
I let the coraline grow in my refugium. No real reason not to, unless you would like to display it separately (as some people do, a refugium can be attractive also). Even then you could just remove some off the front pane.
Green algae on your sand... not too uncommon, depends on how logn your tank/refugium has been running. I've seen similar things in tanks a few months old; in mine, I broke it down initially, and then it just gradually became less of an issue as the tank aged.
On the TOTM, others have asked the same. What I've said is to look at the dimensions on that tank! It's HUGE... I forgot how many thousand gallons, not your typical tank at all (this is on the scale of public aquarium tanks)... plus, it has a fluidized bed filter and I forgot how many hundred lbs of live rock, all places to house a backup store of bacteria. I don't think we can necessarily take his principles and apply them to the average hobbyist tank. I leave my own sand bed alone, I think it's been doing its job so far, and hasn't caused me problems. If you want a change, I agree that doing it in a section at a time may be best to lessen instability. Disturbing it too much can cause a crash.