There has been much talk about the fish in your area and what you are doing. It sounds like you're enjoying the process, which is great. But, and please don't take offence, your tank does not appear to be suitable for a marine set-up at all. That looks like a very small freshwater filter your are running, designed for a much smaller tank (a whisper 10 perhaps) and is likely the reason you have high nitrates. And if your talking about upgrading your lights, what are you running right now? Finally, that spiny lobster has probably eaten all your other invertabrates, and the CBS will be next on the menu once spiny gets big enough.
In order to overcome your filtration issues, more frequent water changes will help, or even cure that problem. But I wouldn't take water from the canal, even if the salinity is right. Surface run off can lead to contaminates and high phosphates. Off shore water is the best if you decide to go the "free" route. You can store it in a bucket or cooler and changes 1-2 gals daily.
Give us info on the filtration and lighting you currently have. Not sure what you meant by "4 t5s 2 day 2 night", but if you get a 4 bulb T5HO light, the simplest set-up is 2 actinic and 2 white. But they all come on during the day, actinic is NOT for night.
