No such thing as a stupid question. You'd be fine using a 15-20 gallon tank and it will work out better for you in the long run since you can raise out the fry to a decent size there.
You're absolutely right in thinking the fry would have a tough time finding food so what usually happens is that hobbyists will feed more to compensate and they end up fouling their water. The best way to feed these guys is by using a turkey baster and target feeding them...meaning, suck up some rotifiers with the baster and blow it right into the cloud of fry.
Here's the trick I did when breeding angels and discus, only fill your 15-20 gallon 1/3 or 1/4 with water and place the eggs/fry in there. This way, they'll have a much easier time finding the food. The fry will usually stick together in a small swarm and as as they grow out they will begin taking up more space in the tank. When they get big enough that you see fry in all four corners of your tank, they are running out of space and it's time to add some more water to the tank. This is what I used to call the"4 corner rule" and it was a quick indicator for me that the fry needed more space in their growout tank. Keep doing this until the 20 gallon is eventually full of water and fish and when they fill out all 4 corners again, it's time to split up the brood into larger growout tanks.
Again, you can use your sponge and live rock combo but there will not be enough circulation for the live rock to keep it healthy. Try adding an airstone strip and make sure there is enough water movement in the tank...just don't use too powerful of a pump and don't let the bubbles stick to the live rock.
HOpe it makes sense
