i've never used that brand of filter before, but you do have the right idea that you should have *slightly* more filtration than the tank size. so a filter of 10-20g capacity is right on with what will make most fish happy. hiding the intake behind something usually ends up with choking the filter off, so i would tend to disagree with that. healthy fish will be able to get out of the current, although if the filter was *too* strong of course it would be a problem. you can tell by how the fish act if they don't like the current in the tank and adjust the flow accordingly. they'll usually hide behind a rock/plant to escape the current if it's too much for them. also, it's usually better to block the output of the filter before considering blocking the input as a general rule.

if you are getting your fish from petco as well as your filter, that may be a reason for concern. those fish are not always the healthiest, it's all a matter of watching them for a bit before you decide which ones to buy. make sure you get strong fish that don't have oddly shaped bodies and no abnormal marks or signs of disease. from your description it sounds like your fish were not the healthiest specimens, but you didn't say how long it was between when you brought them home and when they started acting lethargic.