BG,
Cheers my friend!
You proffer some very thoughtful questions in your post that perhaps other aquarists were thinking about and I'm sure will benefit from the consideration. Thank you!
Answered chronologially from the first post:
* No worries about an unfavorable response by the coral to the tied fishing line. So many incidental organisms in the wild naturally take up residence in the corallum of scleractinia quite harmlessly. Many aquarists can recall seeing the feathery "feet" of barnacles kicking out from their embedded lair in "Closed Brain Corals" (Faviids and Mussids commonly), fanworms/"featherdusters" in Acroporids through Poritids, and ever so much more interesting... the gall crabs in SPS that tease and coax a fine branching scleractinian to grow over many weeks and months to form an living encasement around them that effectively imprisons them! I believe it is the female of some/many/all of these species that does this and the male must fertilize the female's eggs from outside of the gall through the opening she has left for herself (at least that is the story I can recall from one night chatting with a biologist after an obscene amount of beer...heehee). At any rate... you will observe that many wild imported coral come in with various growths and adaptations from external stimuli. No biggie. As far as the chaffing, I'm trusting that the frag is tethered/fixed tightly and that sufficent random turbulent water flow will not permit a rythmic or repetitive abrasion... still... I'm sure the coral would simply adapt with a callus if had to.
* For the next two questions in your first two post, one must be able to visualize the dynamics of light and water flow in a three dimesional plane... the very pieces in suspension relative to a benthic standard. As far as comparative best use of space... coral sitting on the sand or any other substrate are limited obviously by the sum total of that benthic area (x sq feet or inches). And so, take for example a situation where such corals are set upon the sand bottom or in sand in cups as you have suggested in an aquarium 4'x2'x2'. There are 8 square feet on the bottom of this aquarium upon which to grow coral. Even if you could optimally grow coral fully in all directions and touching branch to branch on this bottom, you are still limited to 8 sq ft. And so... how big will we let these frags get before moving them (trading, selling, refragging to produce more...whatever)? Really? Frags are commonly traded rather small... just a couple of inches and a few branches at best. Lets forget that small size though, and let's say we are going to be generous... to 4" in diameter? Grapefruit sized? If we now look at the aquarium as a culturing vessel with several planes we can see that beyond the 8 sq ft sand bottom (leaving nearly eight inches to grow this 4" coral in) we have two other planes above the bottom that are also 4'x2'x8". Now imagine them sectioned like a checker board. One would suspend corals on each plane in alternating "sections" (like the ed sections of a checker board on the lowest tier, then on black in the middle and back to red on the top tier). Now realistically one could not effectively grow coral in an aquarium this packed any more than we can expect corals growth on the bottom only to grow fully in a continuous upward maximum block of product filling the tank

(as neat as the thought is. But this example hopefully will help folks realize that there is far more space to grow coral in than setting them along the flat plabe of a rockscape or vessel bottom.
* pertaining to your concern about the need for suspension with regard for the benefits of light refracted off the white bottom and water flow: corals held in suspension can and do grow faster than benthic orphans in part because a frag sitting on the sand or rock bottom does not have maximum water flow upwelling through its solid substrate underneath (where a freely suspended piece can be bathed fully in turbulent water flow). And as far as light refracted from white sand to a coral sitting on it versus above it.... WAY big difference if one thinks about it. It is a matter of the angle and scope of refracted light relative to the distance of said frag from the reflective surface. Many great examples to illuminate this point (pardon the pun). How about your pendant halides? The further up you suspend the unit the wider the spead of light on the aquarium. For those readers blessed to see a landscape blanketed with snow... the sight of sheer white sky, snow covered trees and ground on a sunny day is painfully blinding... yet if you pull your face close to that same snow white ground, you can focus and handle the limited starkness. So too will your corals benefit from the refaction of light from a wider spread by being suspended higher above a white sand bottom than forcibly subjected to the limited light at best from the very shadow of their near form on the "ground".
* In your second post, you raise a very good point about light acclimation for frags in the same system (water quality). In a nutshell... yes... there most definately should be some consideration for frags that are likely going to be exposed to the same or brighter light witha move. In a perfect world, an aquarists would have a submersible luxmeter to compare the relative change in light to help plan with tools or techniques to temper the stress during acclimation. For the sake of brevity (Ha! now that's funny looking back at this reply and my long-windedness already

!)... let me direct interested parties to an article that I wrote on this sort of acclimation and placed on our good friend Bob Fenner's web site at
http://www.wetwebmedia.com/acclimcoralslight.htm For those new to WetWebMedia do check out the site fully from the home page. Bob has an amazing anount of free content there (it is all and only free content!!! tens of thousands of pages, pics, articles, FAQ's etc). This article is a revised exerpt for anyone that has my first book.
* as far as the blowing, twisting and turning... all part of the ballgame. With good random turbulent flow (generally good, easy and inexpensive to produce flow for coral culture) this will keep most coral frags bathed with reasonably good water flow. Indeed, not all places in the tank (like near the front glass) can be optimal. Some frags will fare better... but alas... no matter with enough time for growout or proper rotation of piecesin a dedicated farming venture.
Thanks to all interested for reading this far. Heehee... needless to say, please don't ever hesitate to ask me a question if you want my attempt at a complet answer

Or something close to the length of the preamble to the constitution
With kind regards, Anthony Calfo