Biotopes are my favorite type of setup. Almost all of my tanks, both SW and FW, have been biotopes. I have three that I'm working on now: a 20G for clownfish, a 40G Caribbean Centropyge argi habitat, and a 40G Florida dollar sunfish biotope.
If you're keeping a small tank, here are a few ideas:
*Banggai cardinalfish biotope: the linked IUCN Redlist report gives a pretty detailed description of their habitat. For an easy Banggai habitat, you could use Caulerpa prolifera (which resembles seagrass but is much, much easier to keep), along with an LPS like Goniopora or Heliofungia, just to give a couple of examples. If you want to keep SPS, Montipora digitata would be beautiful and biotope-accurate. I wouldn't keep more than one or possibly a bonded pair of Banggai, because unfortunately they fight. Make sure to buy captive-bred Banggais!
Pterapogon kauderni Habitat & Ecology
*Ocellaris or percula clownfish/"anemone" biotope: I'm actually doing this myself in a 20G, with aquacultured Sarcophyton and captive-bred clownfish. There are species of Sarcophyton that look amazingly like carpet anemones, especially Stichodactyla gigantea, which is one of the natural hosts for ocellaris and percula. I have a couple of "Fibre Light" toadstools from AquaCorals (specifically because they're low-growing and look a lot like S. gigantea when they get big enough) that I'm growing out, and I'm planning to add a couple of ocellaris or percula to the tank for them to host. A lot of clowns will adopt a leather coral as a surrogate anemone, and IME the toadstool corals actually thrive with a clownfish present. Toadstools are also infinitely easier and more sustainable to keep than anemones!
*Elegant dottyback biotope: If you want to depict a very specific micro-habitat, try replicating the environment that Indonesian elongate dottybacks are found in: live rock with lots of hiding places, colorful sponges (the aquacultured red or blue plating ones will work well here), and small polyps like Sympodium or Cespitularia. Maybe a nice Montipora setosa, if you want to keep SPS.
Pygmy filefish biotope: Radial filefish (Acreichthys radiatus
) hide in large colonies of Xenia. A pair of these little filefish, along with some live rock and some colonies of Xenia (the striped "silver" kind, not the pinkish pom-pom or Red Sea species) would be easy and definitely something out of the ordinary.