No, you don't use potting soil with hydro. The rapid rooter is the medium you put your seed and/or clone in. There are others that can be used, rockwool, organic plugs and such. The hydroton are those orange balls in your picture. They hold the medium and the plant in place.

To your first question, don't worry, the roots will find the water.

I'm not trying to be harsh here but you need to do a bit more reading on the subject.