Hi,
I’ll just add a bit of info:
1) Yes, if your spectrum is small enough such that the refractive index changes very little with respect to wavelength you can use an imaginary index of refraction. However, if you want to include dispersion effects you need to make sure that your material follows the Kramers – Kronig relation:
http://en.wikipedia.org/wiki/Kramers%E2%80%93Kronig_relations
2) Sure, you can place observation points and areas wherever you feel appropriate. We just include the option of a substrate and cladding because MANY devices are fabricated in the same way. You can change the material for AIR both both section to simulate free space if you feel like it.
Cheers