To your first question (penultimate post), that is normal interaction between males. It is termed "graying out," when the pattern fades like you describe. I see this between two males of my Botia kubotai now and then; not sure if it is the same two males or different ones, as I have five fish. But two will gray out and spend literally hours doing circles head to tail, first clockwise, then counter-clockwise, with one fish leading then the other. This is why one needs a group of such social fish. Three will be better than two, and if you manage to get a few more down the road, even better.
To the second question, I suspect they are picking off tidbits of microscopic food. I am not aware of any actual eating of wood, but loaches, like most catfish including corys, will graze surfaces covered with a biofilm which is sticky and usually contains algae and various microscopic infusoria and such, all of which is food to benthic feeders.
Byron Hosking, BMus, MA
Vancouver, BC, Canada
Something we all need to remember: The fish you've acquired was quite happy not being owned by you, minding its own business. If you’re going to take it under your wing then you’re responsible for it. Every aspect of its life is under your control, from water quality and temperature to swimming space. [Nathan Hill in PFK]