Yep that's the general idea. I'd think a sump right around your stand pipe, with the pipe still coming to very near the same height as the bottom of your tray to help keep fines from draining to your tank might be of benefit.
Also you will probably want to use a round tank for your reservoir as air pressure on the flat sides of a square tank will eventually cause fatigue & possible fracture near the welds.
You're exactly correct in the reason for a surplus of water. Even 5# of air pressure would spew water everywhere if a slug of air were to get access to the fill tube.
Of course the larger the transfer tube the quicker fill/drain action you will get. Therefore the less tempting to up the air pressure for quick fill.
Others who actually have these systems would be better to advise you there. I am merely drawing on past experience with similar projects.
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