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MH....at least a foot distance. You can fry them in a hurry. T5 works well, can be about 3-6" above plants.
Rock wool drowned them? I did a mix of perlite and rock wool 50/50 ratio way back when (photos...now strictly autos), breaking up cubes, wet. (Dry, they emit dust....not good for lungs).
Depending on lumens of T5, you can do them throughout. 250w MH will allow for more bountiful growth.
3-5 gallon pots, depending on what type auto you are growing. Sure you can do smaller pots but you won't reap a good yield, or in my experience. Low stress train the lower branches.
If your light is 250 mh, no, the plants won't stretch. Be cautious of the heat factor. I've fried numerous colas getting too close to the bulb.