5 in nitrates is actually good, even up to 10. Freshwater dip would not be advised as they are delicate and are not plants but implied- Algae. ogo algae is hardy but when conditions are suitable. I would not add this algae to a newer tank as yours appears to be newer. Iron and iodine also needed in water occasionally
Your system is very basic with hang on filter as a main filter. It may be the reason you are seeing nitrates and the issue you will have is that your hang on filter is a mechanical filter and you want to have mechanical, biological and chemical to manage proper water quality. Your unit will polish water and trap particles via the cartridge.
Chemical is what traps and breaks down chemical compounds such as feces and uneaten food often accomplished carbon and GFO
Biological is what utilizes the natural process of biological filtration such as use of ceramic nuggets, bio blocks, and microscopic bacteria surfaces. Best it to add or use a hang on refugium such as Reef octopus or AquaMaxx unit and even add a hang on skimmer such as ice cap K1- or K2 100
Ammonia spike may have been very possible and often undetectable after the spike event and affected the algae in addition to light as it needs at least 5000 to 6500k.