I am not familiar with the Jewel filter, not available here. In general, any pads that you have will be a part of your biological filter, really any part that gets good flow becomes part of the biofilter. The brownish staining is the beginning of your bacterial colony so you really don't want to make the stain go away. The ammonia back down to 2 from around 4 seems like some progress.
The dwarf bristlenose plecs still grow to about 4 inches but are smaller than a normal bristlenose that goes to around 6 inches.