the fish smell is from ammonia, among other things ... biological and chemical filtration will take care of that
marineland doesn't advertise any type of filtration add-on for the Penguin, although it would probably mate with a Hagen quick-filter, all these devices seem to have similar tubing dimensions.
the foam prefilter on the intake is for keeping large debris from getting stuck in the powerhead.. You could use it as a pump to bring water up from your pond area and dump it onto the turtles rocks.
with as high a bioload as you have, you'll need a lot of filtration, I think the canister filter is the easiest and most economical way to accomplish the task.
If you purchase a 2 tray canister, you should fill the first tray with ZeoCarb (or any carbon + zeolite) mixture ... this works excellent at absorbing ammonia, nitrites and odors ... fill the second tray with a medium foam or filter floss, this will screen out any debris that was too large for the carbon to filter. If you get a 3 tray, first tray carbon, second tray foam/floss, third tray pure zeolite (also called ammosorb).
Like the diagram pictured, running the water over the rocks will oxygenate your water and allow biological filtration to occur, further purifying the water, not to mention the soothing sounds of running water
your penguin would fit perfect in the diagram where the powerhead is pictured, or that general area, to provide a little extra water movement.
The under gravel filter won't work because your waterlevel is too low, and your bioload / waste load is so high that it will just clog up and need constant cleaning.
As far as inexpensive, a lot of 'cheap' filters won't work because of your low water level and high amount of waste being generated.
You can get the fluval 204 for around $50 online ... or the 304 for $70, the difference being the 304's pump is about 2x as strong, and it has three trays instead of two
Good luck with your project, let us know how it works out and feel free to ask away!