Hi Alex, I use the same rig for live baiting and for jigging a dead ballyhoo. This link is to a typical set up.
Sea Striker Live Bait Kingfish Double Rig w/ 60lb. #7 Wire - DLBR - BoatersWorld.com
The small j-hook goes up near the head of the bait and the treble goes down further towards the tail. For using dead ballyhoo I squeeze them as if I were preparing them for trolling. I squash the ribs and break the backbone. Then I put the small j-hook through the lips to close the mouth and slip one of the trebles into the skin down near the tail of the bait. I do use a very small pink or green skirt on the rig that slides down onto the head of the ballyhoo.
Let the bait out slowly and give it very slow and short tugs just to give it a bit of action.
That particular reel may be a little light for the fish we get around here. They probably average 20 lbs or so but a 40 or 50 isn't that uncommon. I would guess you want a reel that will hold 300 yards or so of 20 lb test if they get as big as our fish. If they are smaller in general then you may be fine.