How to create and validate potential grids when attacking a Playfair cipher?
Both your suspicions are correct, BTW. (I solved it, and know the key-word).

You have a crib, namely ATTACK, with a typical pattern: two digrams that are each other's reverse, which means that (if we assume that the crib starts at an even position) the cipher text should also have the pattern "abba". I see a CQQC pattern and you note that CQ is frequent after TH, so that fits nicely with CQ = AT, to give THAT. 

The text starts with QK = TH, so the next letter could be E (as A would probably be followed by T), so V is one of the letters that E can encipher to, so it must be in the same row (probably) or the same column as E (same column means also that they are next to each other, so same row is more likely). This also fits with your UV/VU supposition. It then follows that E,V,U are all in the same row (or column, less likely). And this row is then in the keyword (by how keyword squares are made: E is far away in the alphabet from U and V).

So from this we already get quite a few ideas on how letters are positioned relative to each other, and at the end of the square we expect some almost alphabetic sequences, like WXYZ (minus letters that go into the keyword), etc. 

Fill in some letters (write a program) and guess more letters. If my ATTA guess was OK, you also get CK that becomes KT, which gives us info: overlapping crypto/plain means same row or same column. Etc. etc.

Have fun puzzling it out.