Blog Template, Membership Pro, CoursePress, and Multisite

I have films with tests to sell to professors. We are planning to put together CoursePress Pro with Membership Pro 2.

Our professors need to see course test results taken only by their own students (and not see course test results taken by students of another professor).

To meet this condition, we plan to use Multisite and Blog Template. Using the Blog Template tool, we expect to reproduce a site for each professor. Each professor would then give their students their personalized url such as "professorName.audiovisuallabs.com." The students would then pay for access. The professor would then grade the tests from only their own students.

The first question regards where to set up the multisite for Blog Template. I've read descriptions that conflict about where to set up the multisite and how they affect the permalinks. My hosting company (Hostmonster) puts the multisite inside a folder, like my other single sites, which are all inside a root folder. So the path is home/company/audiovisuallabs.com, even though we can access the site with http://audiovisuallabs.com. Will this work, with the typical .htaccess modifications, so that the urls work the way described above (professorName.audiovisuallabs.com)? Or do I need to have the multisite in its own "root" folder (whatever that means)?

My second question is about the control we give to the professor. We'd like to allow the professor to duplicate a course in his own site (one for each semester), as well as add his own units to the course. But we don't want the professor to be able to modify any of the original content. Is this possible?

Thanks.