I'd go with the sponge. It's cheaper, does not produce a lot of turbulance, it is easy to maintain, and they have small ones for that tank. As far as tank mates go my favorite all time dwarf frog tank mate is other dwarf frogs. These frogs appreciate each others company. I have kept anywhere from 3-5 dwarf frogs in a 5.5 with great success. I am sure others will argue about overstocking, but I don't believe 5 is unrealistic. You just need to keep up on your maintainance.
I have had luck with bettas too in the past, but I have also had couple that were complete jerks.