A good salinity would be 34ppt at 78 degrees which is 1.024 SG. You can go higher or lower by 2ppt if you chose but you won't notice a difference and aiming for the middle will give you a little more tolerance since hydrometers and refractometers aren't always that accurate. 
 
A deep sand bed will do nothing for you in that tank except reduce your volume. I would aim for a max of 1" depth. Setting up something for denitrification in a 20 gallon isn't worth while as water changes will be cheaper and much more effective.  
 
Rock looks fine, it's not a real science so really whatever looks good to you will work. 
		
	
		
		
		
		
		
	
		
		
	
	
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