[tinyreef]

you could try amphipods or marine ghost shrimp (altho they have a tendency to jump out). tiny blue legs and ceriths are nice too.

ime the main issue/problem is the salinity fluctuations. brandon over at RDO seals his systems but that's too much diy for me. an auto top-off is good but takes a lot of real estate for such a small tank.

at another volume level (between pico and nano) maintaining temperature is the issue as there aren't many good small heaters available. your system is small enough that if you keep the room comfortable it should be good. you'll have to worry more about cooling. (of course, this also depends on where you live, Malaysia vs. Michigan)

the light should be fine but you may want to opt for sea lettuce versus a macroalgae. as much as i hate to admit it, waterchanges are probably the best maintenance for picos.

i agree you probably have too much sand. you may want to opt for less sand and just one piece of LR shaped just right. an AZoo tiny hob filter is also a good addition for flow and aeration. hth