1.5" is overkill for 400 gph. To give you the scale of how overkill it is, I have a Herbie drain on a system that's pushing about 3,000 gph, and it's 1.5". And the valve is maybe 30% shut!
On a full siphon, you don't really want that much overkill - it means you'll be running with the adjustment valve almost all the way closed, which can make the system difficult to manage. If I wanted a Herbie that can handle 400 gph, I'd probably drill for 1" bulkheads but use bushings to bring the actual plumbing down to 3/4".
Return sizing really depends on the pump you choose. At 400gph, you don't have to go crazy, unless you've bought a way-undersized pump. I'd be totally happy with 3/4" return plumbing for that kind of flow in most cases, or even smaller.
I also want to know if an internal overflow box is necessary. It doesn't seem to serve a purpose to me. Would someone please educate me on this?
Sorry, in what context? If you drill the bottom or side of the tank, you would typically then build an "internal" box around the holes and put the standpipes in it. In that arrangement, an internal box is definitely part of the design. If you're talking about a hang-on overflow, then the internal box is what sets the water level at a point higher than the entrance to the siphon tubes, so it needs to be there (to keep them from sucking air and breaking siphon).
If you're talking about drilling the back or side and then building an external box around the holes on the outside of the tank, and then drilling THAT box to put the standpipes in it, you still (probably) need an internal box to set the water height relative to the holes.
The only situation I can think of where you would not need an internal box would be if you notched the side or back panel of the aquarium and built an external box, at which point the water level in the tank is set by the notch - and you don't need the internal box.