I'm not a mechanical engineer, but for one I have driven my father's LPG-converted car, and the cylinder didn't melt so far, so I think this is already more-or-less under control. Many car vendors in the EU (especially south and east) offered LPG-petrol bi-fuel powered cars out of the box. (I know of Dacia and Fiat for sure, and according to my brother LPG converted hybrid Priuses are popular in Poland for insanely cheap operations by cab drivers for example).
For engines getting smaller: the LPG operation of petrol engines provides lower power output (and lower torque), so an uptick in LPG powered (dual fuel?) cars would probably mandate slightly different engines sensible (bigger ones), the market would surely adapt to it.
E85 would also be fine if it wouldn't be manufactured from intensively farmed monocultural agricultural products, which make it totally non-sustainable and non-renewable factoring in the sustainability problems of industrial agriculture (soil erosion, carbon depletion of soil, death of soil microbiome, groundwater depletion, etc)
The parking ban for LPG in closed garages is a real problem, I have faced it myself. Though it is justifiable, but then it would also be justified for the BEVs as there were cases already where (heat from) a battery fire compromised the structural integrity parking complexes, so it is a manageable risk probably, and probably mostly legislative.