Why closed loops?

Depending on the pump size, yes...it's better circulation and water movement. The one, in your link, is just one of the many, many ways you can configure it. The one on Marks (melevs) site is showing one built over the back of the tank. Many people drill their tanks and install bulkheads, etc.

Closed Loop Systems are just a great way of getting rid of all the ugly powerheads in your tank.

a great way of getting rid of the powerheads plus it makes it easier to service the pumps by having them outside of the tank so you dont have to move rocks to get to them. i saw this site a while back and loved the idea of having a closed loop in my 75 gal reef. i just moved my fish into my new house and plan on doing this closed loop soon.

Another reason: you could use a large return pump that you can't have submerged and get an insane amount of flow.

Additionally, this external plumbing is a great and easy way to include valvaes to use for adding components that may be used periodically, rather than full time, as well as an easy way to allow permanent equipment to be installed easily. And, by having the pumps externally, the heating of the system is reduced--great for people in hot areas that lack AC and have high power lighting. Might not be enough to prevent needing a chiller, but it will help!