That is a disposable cartridge filter and they are a very poor choice to use to fix water quality problems; especially yours.
I say you have a serious iron problem, and sand from the well. You should have water tests for iron, pH, manganese if possible and hardness and to make sure the gritty stuff is actually sand put some of it in vinegar and let it sit for a day or two and see if any dissolves. If so it isn't sand, and probably will be hardness scale. But I think it's probably sand.
A well producing sand is a bad thing and indicates a problem that will ruin your pump and could cause the need for a new well due to cave in etc. or bury a submersible pump and when you have to pull it, it won't come out of the well.
Unless there is harmless bacteria in the water, iron etc. is harmless and does not mean the water can't be used. And if you'n the kids don't come out of the shower or tub all rusty, there's no problem with bathing in it. Over protecting kids causes them problems as adults...
Gary Slusser
22 yrs in water treatment and well pumps, 13 yrs helping people on the 'net to help themselves.
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