Its normal to get air in the line while vacumming. When I vacuum, I usually vacuum to waste as the water is cheap here and it removes all the dirt better without having to run it back through the filter. If you still are green, then I suggest you continue to shock, scrub, and vacuum until all the algae is dead. Vacuuming to waste will remove the dead algae faster from your system. I have a larger sand filter and super pump. (see my sig for my setup)
Try reading pool school again. Do you have a good test kit? If not, I suggest purchasing the one Dave sells on this site. TF100. Works great for me and I have been doing the BBB method for the past couple years. Crystal clear water. 86 degrees yesterday and now a storn is rolling through.
I plan to swim in it again today once the weather starts to cooperate. All I do is test the water and use the pool calculator and then add the correct amount of chlorine/bleach to my pool. Takes a few minnutes is all.
I may have to vacuum after this storm as when it rains, the worms come out and that requires some cleanup.
Oh yea, and when vacuuming, I would suggest that you leave the skimmer basket in so it catches any of the larger junk. When I vacuum, I have a plate that connects to the simmer and then the hose connects to that plate.
Im sure others will be along soon to give you a better hand on your setup valve there that you have. It is hard to see with those small pics. Bigger pics would be better. A full set of numbers would be good to see too.
Good luck