if 5" works for you, then go for it.. 12" provides more surface area for microbial activity/nitrification, so just make sure you stock accordingly
i've read that coconut husks work, but haven't tried it.. i'd think that it would stay to wet...
i wouldn't put the venture (hole) in on the suction side, cavitation can ruin the pump impeller.. aeratore are cheap and only run a few watts..get one with a battery backup pack if you can, if not, oversize your pump and divert flow back into your ft with a spray bar to add aeration..
i don't raise catfish but so can't really comment, but from what i've seen, "turbid" water is different than "dirty" water.. so again, stock according to your filtration..