Looking at this upper.

https://www.stagarms.com/model-3leh/

also, can I swap out the hand guard on this? Want a lower rail.

Not without changing the gas block. That upper has a rail height gas block as stated. And yes, Stag is good to go , I have three of them. Check Pete's prices at Legal Transfers, may be cheaper yet.

You should be able to install rail sections on the bottom.

You certainly can install rails on the Diamondhead hand guards and that would be the cheapest route (unless you just don't like the Diamondhead).  I've also seen barrels with non low profile gas blocks that also have free float hand guards that stop just before the gas block.  I like the look of a low profile gas block with free float hand guards that cover the gas block but just saying that I've seen other configurations.  I wouldn't think that you'd "have" to change to a different gas block and that it depends on what you want to install and what "look" you want (you will have to remove and reinstall the gas block of course).  

That particular Diamondhead hand guard is a cut-out hand guard and I've seen a few other brands of cut-out hand guards.  I don't know why Stag didn't go with a low profile gas block and a regular Diamondhead hand guard but they didn't.  

One more thing to note:  the Diamondhead hand guards also use their own barrel nut, not the standard barrel nut.  So if you remove the Diamondhead you may need a different barrel nut if your new hand guard doesn't come with it's own.  

What hand guard are you wanting to put on, a different brand of free float hand guard?

+1 for Pete at Legal Transfers.

Every stag upper I had choked on steel cased ammo. This was many years ago

STAG is good to go.