In addition to saxon's comments...
1. At what level do I set bottom nozzles (to avoid the dead zone with water/crud)
Depends...
Does the tank have a flat bottom? What kind of "crud" are you talking about? Will the "crud" damage the pumps if it carries over into the suction piping? How often will the "crud" get cleaned out? What is the process fluid? Will the "crud" be suspended in the process fluid? etc...
All these factors will determine where your suction nozzle is located. If your "crud" will harm the pump (or downstream equipment), then you don't want to allow it into the suction piping, which means you will want to elevate the nozzle from the bottom of the tank. If the "crud" build up is high, and you can't remove if for long periods of time, your nozzle will need to be higher from the bottom of the tank. If the "crud" won't harm the pumps or downstream equipment then you can just put the nozzle flush with the bottom of the tank. On the other hand, if the "crud" is suspended in the process fluid, the location of the suction nozzle won't matter. I design tanks for boiler feedwater systems and the typical feed pump suction nozzle projection (above the bottom of the tank) is 3".
2. At what levels should I set my Low low, low and high high level alarms?
Again, depends...
Generally, the low alarms protect your pumps (keep them from cavitating), while high alarms protect your vessel (keeps it from overfilling / overpressurizing). So, it all depends on your system dynamics. If your tank drains very quickly when the pumps are running and there is no inlet flow, then you want to have some distance between your level alarms (to give the operators enough time to react). If, on the other hand, the level falls very slowly when the pumps are running and there is no inlet flow, your level alarms may only be a couple inches apart (4"-6"). Same goes for your high alarms (when there is inlet flow, but no outlet flow - most conservative design-wise). It also depends on your control system. If your alarms have pump starter / shut-off switches you will need less distance between alarms compared to a system that has manual pump controls.
My advice: Use common sense with safety being your #1 priority and consult with your manager or another engineer who has experience with your equipment.
Good luck!
jproj