Kuhli loaches are a nice addition to a tank because they are so different in appearance and activity than most ordinary community fish. They get along fine with other community type fish and eat flake, bloodworms and also some vegetables.
They will dig into the sand or fine gravel and you might not see all of them at the same time. They tend to be seasonal fish in the lfs, so if you don't see them for sale right away, just have a little patience. Pick out ones that have the brightest colors when you buy them.
It's certainly preferable - they like to dig through the sand, and sometimes even bury themselves in it. Anything too hard or sharp could cause them damage.
That said, gravel may be OK, as long as it's reasonably fine and smooth.