Yes they do absorb calcium and build a skeletal structure like a hammer coral.

I have all mine on the sand bed or on rocks just a few inches up. Lower light provided nicer coloration. Feeding is not required but does help them grow and stimulates the feeding response more regularly, which I enjoy watching.
I usually broadcast feed the tank a oysterfeast about 10 minutes after lights out and then feed mysis or rods or TM LPS food a about ten minutes later.