Hi Ruby Shark, Sorry about the slow reply , been away for a couple days.
I would recomend going with the 12 gal. You could comfortably house 4-6 Dwarf puffers and 3-4 ottos. Get a filter that turns your water over about 10 times per hour (aquaclear 150 would do well) and add lots of plants and caves(more overhangs and swimthroughs than actual caves) and the dwarves should be happy. You could also keep a pair (maybe even 3) South American puffers(Colomesus asellus) instead of the Dwarves, the S/A's get a bit bigger (about 3 inches max) and are higher maintenence (teeth need to be trimmed about every 6 months) but are a less aggressive and more active fish.
For the Dwarves I feed them about 25 snails every couple weeks (I have 10). I keep a 10 gal tank with Farlowella cats and White cheeked Gobies that is infested with pond snails, so I always have a fresh supply. Before I managed to get the snail colony established I would just get the staff at the lfs dig the snails out of their plant tanks or sump.
If you decide to go with the S/A's you can help to avoid having to trim their teeth by feeding them a diet of 99% snails, with the occasional treat of other foods.
If you are going with live plants you might want to get a bit of Java moss and position it in front of a cave, I have read that the Dwarves like to spawn in this type of setting.
Good luck, looking foreward to pics when you get things set up.
