The 1m distance between the Kinect/projector and sand is a guideline. You can use a shorter distance, but it could put the projector close to the students’ head height as they use the sandbox.
Have you considered a design where the upper portion can be telescoped up and down? Our sandbox is made for portability in and out of classrooms. A link to our sandbox design can be found in my user profile.
No, sand is not required. What other medium do you have in mind?