I would use paper or corrugated wrap as a substrate, but 1/4 inch of aspen or Eco-earth would work as well.

Any and all UTH's or flexwatt should be outside of the cage. Back heat doesn't work well I'd stick with a UTH or flexwatt covering 1/3 of the bottom of the tank on the outside. This is a well tested and if you are using a thermostat is the safest.