A sponge filter would definitely work. An "Azoo Palm" filter is also widely used by dwarf enthusiasts.
I would be kind of iffy on gathering grasses, they could come with hitchhikers and many other unwanted things. It would be better to get it from an online source, another tank...etc.
In a 2.5-3 gallon, I would start off with anywhere from 4 to 10 or so.
If you already have horses, you will find that dwarves and they have many of the same needs, but also many different ones. For instance, dwarves need 2-3 feedings of live brine shrimp every day...etc....So, I would recommend that you get the book "The Complete Guide to Dwarf Seahorses in the Aquarium" by Alisa Wagner Abbott. That will really help you.
Good luck, HTH.