1/4 hardware cloth won't be sturdy enough. People have had problems with 1/2" HC collapsing under the weight of chicks on top.
You can use MHP for ducks as well as chicks, your plan sounds fine. You just need to adjust the height of the "cave" as appropriate for the residents.

You don't have your location in your profile so this next comment is a bit "open". Generally speaking chicks are fully feathered around 4 weeks of age and don't need any supplemental heat. I don't know about ducks.
You can use MHP for ducks as well as chicks, your plan sounds fine. You just need to adjust the height of the "cave" as appropriate for the residents.

You don't have your location in your profile so this next comment is a bit "open". Generally speaking chicks are fully feathered around 4 weeks of age and don't need any supplemental heat. I don't know about ducks.