AFAIK it's okay to load a hmp (level_load("small.hmp")), not a wmb (this was impossible in prior gamestudio versions, though).
I am trying to display the distance between 2 balls using those 2 types of code tools.
But now do I have to use c-trace somehow to display the distance from the ball to the the landcape on the floor of the level?
Are you dealing with two different problems or is your issue just the first one? In the latter case Helghast's code is fine.