I have 18 kuhlis and 5 "black kuhlis" spread between 3 tanks. Some I ordered from NY, some came from a local shop. Re: food: I find that they eat flake right off the bat, as well as small portions of algae wafers. It's hard to get tubifex worms down to the bottom where the loaches can get them. I've fed mine frozen brine shrimp, but if you have any non-bottom dwellers in the tank it's unlikely they'll sink far enough before being eaten up.
Re: sand: Everything I read suggested that these guys burrowed a lot... but this is not the case in any of my tanks! Two tanks have a 50/50 silica sand/flourite sand mix, one is smooth gravel. While the loaches love to cram themselves into tight spots (especially under chunks of mopani wood), I have yet to see any actual burrowing. But they love cover, especially dense lutea bushes and other low plants like dwarf Anubias
. Anyway, 1.5 inches should be plenty.
How much they come out depends on other fish in the aquarium and the amount of cover available. If your tank is heavily planted, you'll see them a lot more. Larger or more active/semi-aggressive fish make the loaches more reclusive (diamond tetras, frex, aren't a great cohabitant if you want to see loaches out and about a lot). I've read that "spotter" fish (little things that swim freely in the upper two-thirds of the tank, like neon tetras) are supposed to make kuhlis more active, but this is not my experience (though they don't hinder loach activity).
The "black kuhlis" (java loaches) are tougher and greedier/braver than the kuhlis. The kuhlis tend to move timidly, not pushing each other around. Java loaches don't care who's in their way, they shove past everyone if they smell food.
Hope that helps