I dont think you need to do LR and LS if you dont want too, i have a 12 gallon tank and i have deco rocks and coral sand and a filter. I dont use LR or LS and to me, looks like you have damsels, if your going to just stick wth them, waterchanges and not over feeding and it should be fine. In my tank which is fish only like yours i have a blackfin clown and a firefish,
My FO 12gallon has had no ill effects on my fish about a month and a half i have had it up now, as for decoration (is that coral gravel?) if you want a more natural look, you can get base rocks very cheep like £1-2 a KG, and some macro algae that helps with filteration.
And I have to disagree about LS, do dont know how long the sand(bacteria) has been out of contact with their needs, eg oxygen and spors have been in the pack. waste of money in my opinion. If you do get LR then that will turn you sand live over time anyway. I use no live anything and all my fish are healthy and eating flakes wll. If your fish wont eat pellets try flakes or frozen (better, live).