I think the best use of the lower hole would be for a closed loop. If you wanted to go that way. It could draw water through a pump then returned with plumbing over the top of the tank.
I would not recommend using it as a return. Power goes out and you'd have 120G on the floor.
I'm no expert in overflow design, typically I've always built a box. Untamed is the Herbie expert.
J
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