They can be kept in the middle as well as bottom of tank but they have very delicate flesh which when expanded can rub against rocks and cause irritation. Also, they normally have a rounded bottom so it's easy to have them knocked off their perch by certain fish. If they fall and you don't immediately 'save' them it could result in disease/death.
Although it'll probably eat fish food I 'd feed this in moderation and only the better quality food. Small pieces of frozen food like shrimp, squid and clams should make up the majority of its diet.