The 'stuff' to kill hydroids is a substance called fenbendazole, with the popular brand being panacur (best and most easily used in liquid form). It is available at seahorsesource.com under the medicine section. It works very well. The usual treatment is 3 days of 1 dose each day. Search the dwarf forum on seahorse.org not too far back for the dosage. It's been posted there a handful of times.
It will kill all corals with the exception of mushrooms, which will still shrivel and 'hibernate' for lack of better words.
Most snails will die as well, with the exception of nassarius snails, which will also hibernate.
Red lava shrimp survive fenbendazole treatment. So far, the only recorded treatment with these shrimp is the 10% liquid solution.
Most other shrimp do not do so well with it.
It will soak into rock, sand, and reside on the glass for a year to a few years. You can treat any macroalgae and/or seagrasses as well.
For hatching brine, I use the cheap and easy method of using old 2 liter soda bottles. Cut the top cone part off one bottle. cut the bottom off of the other bottle. Place the bottle with the bottom cut off into the other bottle with the open part staying open. Drill a hole in the cap. Place an airline in there and seal the hole with silicone. Instant hatcher.
For a filter, I love the Azoo palm for up to 5g tanks. So it should be perfect for your 3g. Get a cheap, sterile sponge and place it over the intake of the azoo palm so the dwarves and their fry don't get sucked up in the filter.