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Yes the sand point needs to be completely submerged or you will probably draw air into the line.
Probably not unless the aquifer you're drawing from is very large or you don't use much water at any given point in time. The porous part of the point should always be under water or you risk drawing in air. Using a significant amount of water (more than a shower or load of clothes) like with irrigation will lower the level of the water source unless it is very large. There's really no way you can know that for sure so the more water over the top of the point the better.
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