ICE aren’t growing much in size and are getting more and more efficient. Why not make them air cooled? Porches used to be aircooled, and those were performance cars with the engine in the back. I would imagine having an engine in the front might be easier to cool, no?
One issue with ethanol is it is usually made from biomass. Biomass is getting criticised for eating into food production and nature. Burning it is also not emission-free, which is a problem in countries or regions that mandate “zero emission” for new vehicles by a certain date, as an internal combustion engine can, as far as I know, only ever be “low emission” but never “zero emission”.
Other types of synthetic fuels also exist, but, as far as I know, most of them also use biomass as their source or share their main problem with hydrogen: They need huge amounts of electricity for production, which means we would need much more renewable energy (some sources claim 3 to 5 times as much as charging a battery directly) to power the same amount of vehicles. More energy needed for production and transportation also means higher fuel price.
Battery-electric cars are already quite well established and they have large political support, lots of research money and there are a variety of models available for almost any price point. The general public will most likely adopt the most well-established, economical and practical “zero emissions” technology on the market, which at the moment appears to be the battery-electric car.
This leaves synthetic fuels to enthusiasts, which are happy to pay the higher fuel price and don’t mind the additional maintenance of an internal combustion engine. But will there be enough enthusiasts in regions that don’t demand “zero emission” vehicles to justify large-scale production of synthetic fuels and engines? I highly doubt that, which means if synthetic fuels ever become available in passenger cars, they will, in my opinion, most likely be exclusive to low production models (e. g. Porsche e-fuel production, etc.) and therefore only be available to rich people.
tl;dr: Maybe my assessment is flawed, but for the meantime I would suggest not getting your hopes up too high for ethanol saving the internal combustion engine.