My .02
You dont need to use LS if you dont want. I have always just used the dry stuff from my LFS, but becareful of some of the Home Depot stuff.
You can add the sand after you stack the rocks if you wish. Like someone else said it will be easier to suck up the crud that comes out of it if you are bare bottom for now. Plus, it is better to have the rocks on the bottom instead of the sand, which can shift.
You MUST have the tank filled with salt water before you add the LR! Fresh water will kill all remaining bacteria that is within the rock. You will, even with overnight shipping see a fair amount of dieback, which will cause a cycle. This can take up to 4 weeks to finish and dont try to rush it.
Yes you can break it, drill it, whatever fits your needs. Just dont keep it out of the water for more than a couple minutes at a time.