Yes you can use slugs, but I would not if overpenetration were an issue where I lived. Most slugs will easily penetrate the BG and the adjoining walls.
With Birdshot overpenetration is not really an issue at all, but some think that underpenetration could be a problem here. With buckshot overpenetration is not as much of an issue as with slugs, but it could still be a concern. From most home defense ranges it should be pretty irrelevant whether you use birdshot or buckshot. Whatever you use figure out the farthest possible range that you could shoot a BG from and pattern different types of ammo to get an idea of where the pellets will go.
The info on the sight is referring (I believe) to the dimples that are protruding into the inside of the magazine. If you want to add a magazine extension these have to be removed. There are a number of threads on this forum that can help you with this.
Septum Contra Thebes - to be and not to seem good