Hi Val, I used a hay mulch on my first acre in 1983, and lost many plantings to slugs.
It was on top which is the best place for it. I would not put anything unrotted in the soil (which is what it becomes if you put compost on top) because it then takes some nutrients to finish rotting down. For sure you get them back in the end though.
I would stack it in a pile, moist hopefully, to compost for about a year. Maybe grow a squash plant on it next summer.
For wireworm, they are difficult but I thought your nematode treatment should be enough, does it not say that on the packet?
Good luck with the project, it sounds good.