Sand for Refugium

Yep, works fine. If you can find it, calcium based sands are nice because they can help buffer the tank, but silica works just fine as well.

Nope. Silica can is bound up--you'd have to expose it to fairly corrosive conditions for the sand to start breaking down, and if your pH drops to that level (less than 3.0), you'll have many, many other problems. Reef setups in particlar actually NEED silica--sponges and many corals use it. There are many who actively dose their tanks with liquid silica to promote growth. Cyano isn't really related to silica levels, but diatoms are. Diatoms, while they can get out of hand, are an important food source for most tanks and are present in low levels in all healthy systems. It's just when they get out of hand that it's a problem, and that's usually related to other issues, IMO.