No sand it will cloud the water and won't clear before the fish gets there. I don't know if a fish that size will be able to fit in a 4" T, but you should try and make an area where the fish can hide.
I wouldn't remove the rock if you medicate. If using cupramine not much is absorbed by the rock and you can compensate for the little bit that is absorbed by testing. Also the rock won't get "ruined" it will just be good QT tank rock from then on. Don't but it in a tank with corals just keep in the QT. Bacteria and algae will still grow on it, making it useful in the future.
I wouldn't remove the rock if you medicate. If using cupramine not much is absorbed by the rock and you can compensate for the little bit that is absorbed by testing. Also the rock won't get "ruined" it will just be good QT tank rock from then on. Don't but it in a tank with corals just keep in the QT. Bacteria and algae will still grow on it, making it useful in the future.