The closed loop is exactly that, it makes water movement and flow without the use of powerheads. To me that means less "stuff" to clutter the tank and less heat generated by additional pumps in the water. I think if you use dual one inch inlets the actual "vacuum" is less, but you should use some kind of screen just in case. I am wanting to do a closed loop but with a small pump, I dont want a ton of water movement to begin with.
As far as placement, I think most use the back of the tank. Down lower for inlet and about mid lever for outlet. Unless you have a really large tank, then I have seen them on the sides as well.
Eric