How big are your horseface loaches?
I rather assumed they were the species linked above (the only sp. I’ve seen locally over the years) but perhaps they are the dwarf species?
https://www.loaches.com/species-index/acanthopsoides-molobrion
Also this apparent intermediate sized sp.
https://www.loaches.com/species-index/acantopsis-octoactinotos
In terms of tank size, if you must down size, then you must downsize ...
If the alcove is 80cm, do you really want to place an 80cm tank in there? (plus cabinet?)
Looking online, there are some 70 x 50 x 50cm aquariums, not as much length as the 80 x 40 but more footprint, except not the swimming length of a 100-120cm tank (but then you’ve said you can’t fit anything this big ...)
As you already have the 60cm cube, I might be inclined to give it a go, but then I don’t mind breaking down/rescaping tanks etc
As long as you maximize sand area for substrate swimming loaches, the 60x60 may work out fine
I’d place any rocks directly on the glass so the loaches can’t burrow beneath (and possibly be injured), and not too much area occupied by rocks
Wood can be “tumbling over rocks” rather than pushed into substrate, you can also anchor wood (and lava rocks to glass walls)
Tropica Bankwood
https://tropica.com/en/plants/aquadecor/bankwood/
In an ideal situation, you want a group of horseface loaches rather than a twosome, but then you’d really want a bigger tank