Hi Ann,
I shoot a ton of Terns in flight, I shot 1000 frames a couple nights ago, and I shoot with the exact same gear as you so I should be able to give you some info on what I do.
I use the preset "Cases" Canon has setup in the camera. I have found "Case 2" to be the best for most of the shooting I do and I haven't changed it in over three years. Most of my friends use Case 2 also. Not sure if it really makes a ton of difference for the type of shooting we do but it seems to work the best for BIF stuff.
It's Not a good idea to have the shutter not fire until it's in focus. You want the shutter to fire no matter what incase something epic happens and you might be just a hare out of focus. Also if you are loosing focus during a burst it might quit shooting while it is re-aquiring. I think most bird photographers have their cameras set up this way.
The expansion points will help you to aqire the Terns better, especially in the sky so I suggest you keep it set to the 9 point setting you are using. Once you get better try the 5 point and then the single point. Much harder but it is more accurate when you can keep a Tern in the center for a few seconds.
The beauty of shooting terns is they are almost all white so in good light you should be shooting at 1/3200 to 1/5000. Also you should only want to stop down just a little as the distance isn't usually not going to be ultra close so the DOF isn't going to matter that much, f6.3 to 7.1 should be as much as you need.
My typical setting for a sunny afternoon of Tern shooting is f6.3--ss1/4000--ISO640. Obviously you will have to adjust for cloudy or overcast conditions but remember that these birds are white and you should be able to keep your shutter speed up.
Also another important thing that I have learned over the years shooting Terns is I always want to have some blinkies on my highlight alert. A figure about 15 % of the body should be blinking. The Highlights aren't usually blown in that area and are easily recovered with the highlight slider, but the blacks on the head will be much better exposed. This is critical to a good Tern shot, a nice detailed head and a very visible eye, and it is the biggest challenge to getting a really nice frame, besides actually getting one of these suckers in the frame.
Hope I did't write to late as I know you are probably shooting tomorrow morning.
P.S. I decided to post a few images Terns that were taken in the exact same way. Notice the head and eye are very visible but the whites look clean and white. That just got me thinking of anther thing too. If you expose soly for the whites they start to get more grey looking as opposed to keeping them bright white.
Good luck and I hope some of this helps.