The hard water shouldn't be an issue for the plants you plan on growing. If you get your livestock locally and they're in similar rock hard water, then you should be fine.
8 hours of light is a bit much for a tank that's new. Cut it down to 6 hours then slowly ramp it up to 8 when the plants have become established and your tank has cycled. The algae is normal in newer tanks but it should mostly go away as the plants grow and when you keep up with water changes. How deep is your tank? The 23 watt CFL might be too intense for your tank if you have the dome reflector right over the tank.
The Fraternity of Dirt #112